UPDATE 2-AT&T, T-Systems and EDS win 5-year Shell contracts

(Recasts with AT&T interview, changes dateline from FRANKFURT)

NEW YORK/FRANKFURT, March 31 (Reuters) - Top U.S. phone company AT&T (T.N: Quote, Profile, Research) and a Deutsche Telekom (DTEGn.DE: Quote, Profile, Research) unit won five-year contracts worth around $1.6 billion each to provide communications and technology services to Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research).

Royal Dutch Shell also signed a $1 billion outsourcing deal with Electronic Data System Corp EDS.N as part of the oil company's efforts, unveiled in December, to cut costs by outsourcing a substantial part of its technology operations.

The move comes as global corporations like Shell seek to upgrade their networks to enable more Internet-based communications. Many businesses are also trying to simplify the management of their various communications and technology contracts.

AT&T said it will manage Shell's local phone and mobile communications services throughout the world, and offer access to AT&T's global, Internet-based network.

Around 560 Shell employees in the Netherlands, Malaysia, the United Kingdom and the United States are due to join AT&T's payroll of 300,000 workers worldwide.

AT&T, which has also struck networking contracts with International Business Machines Corp (IBM.N: Quote, Profile, Research) and General Motors Corp (GM.N: Quote, Profile, Research), said it is negotiating more corporate contracts and that a slower U.S. economy is not hurting such talks.

"We are involved with a number of similar-type bids, and it really cuts across a number of verticals from an industry point of view," Ron Spears, AT&T's president of global business services, told Reuters in a phone interview.

"I haven't seen anything that's causing negotiations to be disrupted," he said.