Australian telecom services provider Telstra is understood to have terminated its IT outsourcing contract with Satyam [Get Quote]. The contract is believed to be worth $32 million (around Rs 1.6 billion) a year.

Media reports in Australia say the contract has now been awarded to EDS (part of IT major Hewlett-Packard). It is also understood that Satyam's new chief executive, A S Murty, had rushed to Australia last week in a last-ditch effort to retain the contract, which accounted for about 35 per cent of Satyam's revenue from Australia.

A Satyam spokesperson said, "We don't comment on individual clients."

For the past two months, ever since the news of fudging of accounts by the company's erstwhile chairman, Ramalinga Raju, came to light, the beleaguered Satyam has been struggling to retain clients.

While industry sources say six-seven clients have cancelled their contracts, Satyam has confirmed that only the US-based State Farm Insurance Co has terminated the contract with the company.

Reports say the United Nations has also decided to snap a direct contract with the company.