Vodafone's Indian joint venture is transferring all of its information technology-related work to IBM Corp. under a 5-year contract that will reduce costs and improve services, the company said Monday.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 Ltd., 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.

"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, 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.

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.

It also marks a twist in the trend in which major Western companies have looked to Indian outsourcing firms to handle software design, customer calls and other jobs. With the rapid growth of the economy, companies in India also are farming out technology-related aspects of their businesses — in some cases handing the work to global companies with outsourcing centers in India.

Armonk, New York-based IBM, the world's largest computer service company, now employs about 53,000 people in India. In 2004, the company won its first major outsourcing order in India — a 10-year contract from the country's top mobile phone company, Bharti Airtel Ltd. That contract, which was then valued at $750 million, is similar to the latest deal with Vodafone Essar.

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.