As a part of its cost cutting measures, Vodafone Essar has signed a five-year agreement to outsource all its information technology operations to IBM India.

The deal is designed to boost efficiency and further enhance customer service and aims to ensure scalable, flexible and resilient IT support for the fast-paced roll out of new network infrastructure to keep up with the rapid growth in Vodafone Essar's customer base.

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, spanning hardware and software.

The agreement will encompass the management of IT services including the development and maintenance of key applications such as billing, business intelligence and financial systems.

To ensure greater flexibility for the telecom company, the deal has been constructed on a risk-sharing basis under the control of stringent Service Level Agreements.

IBM India will also manage other internal IT services for Vodafone Essar such as data centre operations and IT help desk, while supporting key areas such as security and change programmes. Vodafone Essar will, however, continue to retain full strategic control of its IT requirements.

Asim Ghosh, managing director, Vodafone Essar, said, "This agreement further demonstrates our continued focus on scalability and cost control, key criteria for success in the Indian mobile market. In IBM, we have chosen a global partner committed to the industry and with a proven track record in the region."

Vivek Gupta, director and country manager, communications, IBM India South Asia said, "India is home to the fastest growing telecom market in Asia, and with that comes significant challenges including effectively managing growth and improving profitability. IBM is delighted to share its extensive telecommunications industry insight and global IT outsourcing experience to help Vodafone Essar continue to deliver quality services to its rapidly growing customer base."

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. That agreement was designed to improve the quality of software produced as well as deliver greater flexibility.