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EDS Sells Wireless Group

Continuing its transformation process, EDS sold off one of its wireless software ventures for $57 million, officials said Thursday.

Syniverse Technologies, a telecommunications outfit specializing in wireless phone service in Tampa, Fla., paid cash for EDS' Interoperator Services (IOS) North America to flesh out its wireless offering. IOS North America provides business intelligence reporting and roaming, clearing and settlement services for 3G and wireless phone carriers.

The deal is expected to close in the third quarter. Kevin Lightfoot, an EDS spokesperson, said IOS North America's 60 employees will retain their jobs but will instead work for Syniverse.

For Syniverse, the acquisition fleshes out its telecom services group and gives the company the infrastructure to support its next-generation voice and data technology.

"Through the extraordinary talent and expertise that both companies possess, we will lead the industry toward seamless 3G services and provide state-of-the-art interoperability solutions that resolve the complexities of clearing and settlement across technologies and geographies," said Syniverse CEO Ed Evans in a statement.

EDS, on the other hand, will press on with its multi-year plan to regain footing in the IT outsourcing industry after a series of missteps.

"What we're doing is focusing on our core assets and strengths," Lightfoot said.

In the past 16 months, EDS has sold numerous other divisions, including its consumer network services unit, automotive retail group and credit union industrial group. The end goal is to focus on what it thinks its core is: providing business process and IT outsourcing as well as application management.

This is just the latest in a string of hits EDS has taken recently. Earlier this year, the company had to write off hundreds of millions of dollars in contract delays with the U.S. government, specifically the $7 billion Marine Corps intranet project.

In July, Moody's Investors Service downgraded EDS' credit rating to junk-bond status, stating it had a negative outlook on the company's future. In response, EDS issued a same-day statement rebutting Moody's analysis. "We have taken a series of aggressive steps to support our investment-grade rating," the company said in its statement. "Given our progress and sound financial footing, we are in strong disagreement with Moody's decision."

More recently, the Associated Press reported an EDS system was responsible for a computer failure that grounded American Airlines and U.S. Airways for several hours on Aug. 1. An airline employee entered the wrong information into a database field, causing a cascading failure that showed every plane as full.

Despite the skid, Lightfoot said his company is a work in progress and is gaining new contracts and renewing existing ones.

"We're starting to see traction now in the marketplace," he said.