Leading global mobile operator Vodafone plans to shift key businesses of its struggling German arm to its shared services unit in India to cut costs, executives aware of the development said.
Vodafone India Services Pvt Ltd (VISPL), the shared services subsidiary of Vodafone UK, may soon handle a host of back-office work for Vodafone Germany, including IT operations, network monitoring services, key administrative functions like book-keeping, and dealing with complaints, the executives said.
"Given the tough economic scene in Europe, our colleagues in Germany are looking to shift some jobs to India as work can be done in a more cost-efficient manner," a senior Vodafone Group executive told ET.
Vodafone Group Plc did not reply to ET's query on which businesses in its German arm were being shifted to VISPL. However, Ben Padovan, head of media relations, said in an emailed reply: "The announcement by Vodafone Germany is still subject to potentially many weeks of consultation until anything is finalised. We have no further comment to make on this from a group perspective."
VISPL runs shared service centres in Pune and Ahmedabad, and its 4,500-strong team does back-office work for Vodafone's operating companies in the UK, Qatar and Australia. But VISPL staff is unlikely to engage with Vodafone Germany customers directly due to "language challenges", the executives quoted earlier said.
Vodafone Germany had recently said it would cut 500 jobs to stay competitive in a challenging mobile phone market and had reportedly said some of these jobs would go to Romania and India.
Sector analysts like Mahesh Uppal, director at Com First (India), a consultancy dealing in telecom regulatory affairs, believe Vodafone's European units can ensure as much as 30% in cost savings by getting critical back-end work done out of India, especially at a time when telecom firms across recession-hit Europe are battling macroeconomic pressures and mounting costs.
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