Vodafone Group Plc has selected IBM Global Services and EDS Corp to provide application development and maintenance services for key IT systems.
The announcement follows a selection process lasting eight months, during which the number of candidates was reduced from 11 to the final two. Vodafone expects to conclude negotiations and finalize contracts with both IBM and EDS over the next few weeks.
While the financial terms of the deal were not disclosed, Vodafone said it expected cost savings of between 25% and 30% within three to five years, adding that spending on application development and maintenance during the last financial year totaled approximately 560m pounds ($1.1bn).
As well as outsourcing its applications, Vodafone is also looking to cut costs by handing over control of data centers and network supply chain management to third-party vendors. In June this year, the company announced a net loss of about 21.8bn pounds ($40.9bn), the largest-ever loss in British corporate history.