Vodafone's India unit awards tech contract to IBM

Vodafone's Indian joint venture is transferring all of its information technology-related work to IBM under a 5-year contract that will reduce costs and improve services, an Associated Press report said.

The Associated Press report said the company did not disclose the deal's value, but IBM said a similar contract earlier this year from Idea Cellular, whose network and subscriber base is half that of Vodafone Essar is expected to be worth between $600 million and $800 million over 10 years.

Vodafone Essar is India's fourth-largest cellular phone company, in which the British company acquired a controlling stake for $10.9 billion in May, the report said.

'Under the deal, IBM India will assume responsibility for the management of all Vodafone Essar's IT operations with the exception of network service platforms,' Vodafone Essar, quoted by the Associated Press report in a statement, said.

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, the statement said.

It would not lead to job losses, the company said. 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. The rest will be retained, it said.