IBM Wins Vodafone Outsourcing Contract

Vodafone Essar an Indian cellular phone company has outsourced its information technology-related work to IBM under a 5-year contract that will reduce costs and improve services. With Bharti-Airtel, Idea Cellular and now Vodafone Essar in its client list; this is the third Telco deal in India for IBM.

‘‘Under the deal, IBM India will assume responsibility for the management of all Vodafone Essar’s IT (information technology) operations with the exception of network service platforms,’’ Vodafone Essar said in a statement. The agreement will include maintaining billing, data centers and financial systems.

The deal builds on Vodafone’s existing agreement to outsource to IBM its application development and maintenance services in its operating companies in Spain, the Czech Republic, Australia, New Zealand, Portugal, Ireland, Greece, and Italy.

According to the statement the contract would not lead to job losses. About 300 of the 390 full-time employees, who are currently engaged in information technology-related work at Vodafone Essar will be transferred to IBM and the rest will be retained with the company.

The contract reflects IBM’s efforts to win more business within India, where it is investing $6 billion over three years through 2009 to expand service centers catering to customers worldwide.

Vodafone hopes the engagement with IBM would compliment ongoing efforts to increase market share in India, the world’s fastest growing mobile phone market where 6 million new subscribers come on board each month.

Vodafone Group CEO Arun Sarin told an investors’ meeting in London Monday that the company aims to increase its market share in India from 17 percent to between 20 percent and 25 percent over the next few years.

‘‘This agreement further demonstrates our continued focus on scalability and cost control, key criteria for success in the Indian mobile market,’’ said Asim Ghosh, managing director of Vodafone Essar. ‘‘We are confident this will deliver cost efficiency as well as an enhanced service to our customers.’’