Mobile phone giant Vodafone Essar will outsource its entire IT operations to IBM India in a bid to cut costs and develop its business in India, Vodafone announced Monday ahead of an India Investors Day in London.

"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," said Asim Ghosh, managing director of Vodafone Essar.

"We are confident this will deliver cost efficiency as well as an enhanced service to our customers."

The move follows the formation of a new cellphone tower business company Saturday by Vodafone Essar, Bharti Airtel and Idea Cellular, which is aimed at providing infrastructure to all mobile telephone operators in India.

The five-year agreement aims to ensure scalable, flexible and resilient IT support for the fast-paced roll out of new network infrastructure, keeping pace with the rapid growth in Vodafone Essar's customer base.

At the same time, the agreement is expected to lead to the faster roll-out of more varied services to customers, while delivering greater cost efficiencies to Vodafone Essar.

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 both 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.

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

Meanwhile, senior Vodafone and Vodafone Essar executives were presented to the city of London Monday in a bid to acquaint them with investors following the formation of the new company, called Indus Towers.

London-based investors - addressed by Vodafone Chief Executive Arun Sarin, Ghosh, Vodafone CEO for the Emapa region Paul Donovan, Vodafone Essar CFO Andrew Davies, CTO Naresh Gupta, and CMO Harit Nagpal - were given a detailed presentation of the Vodafone Group's India operations.

Sarin and Ghosh told investors they did not expect state-owned Bharat Sanchar Nigam (BSNL) to pose any challenge to private players in India's rapidly-growing mobile phones market.

Sarin said he expects consolidation in the market after the new spectrum policy has been announced by the government.

"Six to seven players is one to three too many," he said.