BackGovt, telecom to push local BPO firms’ earnings to $1bn by 2010
Govt, telecom to push local BPO firms' earnings to $1bn by 2010
Premium
Strong demand from telecommunications, financial services and government customers will help boost revenues of India-focused call centre and back-office services companies to over $1 billion (Rs4,242 crore) by 2010, more than double this year, tech researcher Gartner Inc.’s local office has predicted.
Local business process outsourcing (BPO) services companies, led by Infovision Group Ltd, Magus Customer Dialog Pvt. Ltd, and Sparsh BPO Services Ltd, will, as a result, grow at a compounded rate of 100% until the turn of the decade. “The next three years will usher in a shift for the BPO market in India, from a primarily offshore focus to both domestic as well as offshore," said T.J. Singh, research director at a local Gartner unit.
Services built around customer acquisition and retention, payroll and human resource, finance and accounting, mortgage, cheque, claims and insurance processing, and supply management are seeing maximum demand.
The competition among companies in telecom, banking and financial services to expand market shares has increased dependence on call centres and BPO service providers, Singh added. ICICI Bank Ltd, India’s second largest bank by assets, for instance, handles 1.5 lakh calls every day, growing at 20-30% annually since about seven years ago.
Phone service firms such as Bharti Airtel Ltd and Hutchison Essar Ltd have large call centre operations—partly outsourced—to service customer queries. Bharti Airtel, for instance, has outsourced its customer care function to IBM Daksh Business Process Services Private Ltd, Hinduja TMT Ltd, EDS unit Mphasis BFL Software Ltd, and Colorado, US-based TeleTech Holdings, Inc.
The demand is strong enough for home-grown domestic BPO services firms to set stretch targets for themselves. Infovision, a Rs200 crore BPO company that earns about two-thirds of its revenues from its nearly 50 domestic clients, has set a target of growing its sales fivefold in three years.
“We have grown revenues by 100% over last year and are looking at sustaining this rate to touch Rs1,000 crore by 2010. Around 80% of this growth will come through organic growth," said Aditya Gupta, the company’s managing director, who expects his workforce to grow 400% to 25,000 by then. The remaining 20% growth will come through acquisitions.
Infovision is also looking for business from the government and state-owned companies. “This year, we will increase our focus on the government sector as well as public sector units. We are also looking at an opportunity to build a business around requests under the Right to Information Act,"he said.
Magus Customer Dialog, a BPO firm with revenues between ₹ 40 and ₹ 0 crore focused exclusively on the domestic market, serves customers such as Bharti Airtel, Hutchison Essar, Idea Cellular Ltd, Wipro Ltd, Jet Airways Ltd and Shoppers Stop Ltd. It plans to reduce concentration of its revenues from telecom clients as it grows its business further.
“We are slowly expanding (our business) in other sectors such as banking, financial services, insurance, retailing etc. and are confident of growing between 100% and 150% in the next three years," said Shyam Sunder, director at Magus. The company has been growing at a compounded rate of 60% over the last three years. Magus’ target for 2010 is Rs250 crore in revenue, and a 14,000-strong workforce, more than three times the current 4,000.
Other companies looking to grow on the strength of the business they get from domestic customers include Sparsh BPO Services, which handles all customer calls for Bharat Sanchar Nigam Ltd’s mobile phone and broadband businesses in India. Other telecom companies, such as Idea Cellular and Hutchison Essar, which are looking to outsource customer care services, will add to the opportunity for homegrown call centres and BPO firms.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
