Vodafone Outsources to IBM, EDS

NEWBURY, U.K. -- Vodafone has selected EDS and IBM to manage its application development and maintenance services in a global IT outsourcing deal, as part of its strategic commitment to reduce costs while leveraging its regional scale.

Vodafone hopes to conclude negotiations and finalise contracts with the two outsourcing partners in the coming weeks.

Under the terms of the proposed arrangements, each outsourcing partner will provide application development and maintenance services for key IT systems to separate groupings of operating companies within the Vodafone Group. Vodafone will retain full strategic control of the initiative, which focuses on writing code for and maintaining systems such as billing and Customer Relationship Management.

The proposed arrangements form part of Vodafone's cost reduction strategy. Against this backdrop, Vodafone continues to stimulate revenue growth through the roll out of new services and attractive tariffs which encourage customers to use their mobile phones more extensively within the home and office.

Arun Sarin, Chief Executive of Vodafone, said: "This initiative is a good example of how Vodafone is finding new ways to deliver greater cost efficiencies across the business. We are exploring the possibility of outsourcing other non-core activities so that we can focus on our customers.

"The outsourcing of this application development and maintenance work complements a series of other projects designed to reduce Group overheads including the regional consolidation of data centres and the centralisation of network supply chain management."

Vodafone Group plc (NYSE: VOD)