The move is part of Telstra's Strategic Review announced in November 2005.

The review process is in its early stages and KAZ is unable to comment for several months.

In a statement, Kaz said its ICT services business is not part of this review, is not for sale and is a key part of Telstra's strategy to deliver comprehensive, end-to-end ICT solutions to Telstra's business and government customers.

KAZ has also divested its interest in Perth-based software development company, Fundi Software Pty. Ltd. in a management buy-out.

Acquired by KAZ in 2000, Fundi's IT services business was integrated into KAZ, leaving the software development business as a separate entity. Fundi Software is the business that KAZ is now divesting.