VODAFONE is considering a large technology-outsourcing deal that could save the mobile-phone company £300m a year.

According to industry sources, IBM is the favourite to win a contract that could take in billing, software development and customer-relationship management.

The move is being seen as a response to shareholders’ concern about Vodafone’s weak share price and declining profit margins, and growing unease with Arun Sarin, the company’s chief executive.

One analyst said: “In his desperation, Sarin is planning to sign a gigantic contract with IBM to offload a big chunk of costs.”

It was suggested this weekend that Vodafone was seeking enormous savings, perhaps running into billions of pounds. This would imply a transformation that would require thousands of staff to transfer to IBM, and lead to a big improvement in the group’s profitability.

Vodafone said nothing on this scale was being contemplated. However, the company conceded it was considering a wide-ranging outsourcing deal. It said: “We already outsource some IT functions. We are looking at outsourcing other functions. No decision has been taken. There are a number of suppliers that we are looking at.”

Vodafone already works closely with HP, the American computer giant, for a lot of its technology needs. It has also worked with Dell.

One source said Sarin’s plans were proving contentious. “It’s being fought over in the company. It would involve a very, very dramatic change in the staffing, in who is responsible for what. It would have a very big impact on margins.”

As The Sunday Times reported last week, a number of Vodafone’s largest shareholders want the company to pull out of America, where it owns a 45% stake in Verizon Wireless, a joint venture with Verizon Communications. Although Verizon’s mobile arm is growing rapidly, it uses a different brand and network technology, and no longer pays Vodafone a dividend.

Standard Life and Morley last week publicly called for Verizon to be sold — increasing the pressure on Sarin.

Another top 10 shareholder this week complained about the amount of money Vodafone is spending in emerging markets. Last year it spent £6 billion buying companies and stakes in Romania, the Czech Republic, Turkey, South Africa and India. It was widely seen to have overpaid for Telsim in Turkey.

The investment chief said: “The real issue is the string of dilutive deals they’ve started to do. The management are behaving like crack addicts — once they’ve bought something they want more and more.

“Sarin has lost the confidence of investors and ought to go.”

The fund manager was sceptical about the importance that Vodafone attributes to its brand and global network. “It’s not Procter & Gamble, it’s not Persil or KitKat. The Vodafone brand is meaningless. Customers are fickle and go for the best deal or phone.”

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