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Adith Charlie

Mumbai, Nov. 25 Chennai has displaced Mumbai as the most preferred destination for ITeS and BPO companies wanting to set up delivery centres in India, according to a study done by Dun & Bradstreet.

At fiscal-end 2008, 14.1 per cent of the delivery centres in India were located in Chennai, closely followed by Bangalore with 14 per cent and Mumbai with 13.3 per cent.

Dun & Bradstreet’s study for the previous year saw Mumbai as the most preferred BPO location while Chennai was second in that list. “The growth rate in Mumbai in terms of number of delivery centres has plateaued whereas Chennai has registered a steady year-on-year growth of around 14 per cent ,” Mr Kaushal Sampat, Chief Operating Officer, Dun & Bradstreet – India, told Business Line in an e-mailed statement.

The comparative affordability of Chennai (vis-a-vis Mumbai), availability of talent, and a robust academic ecosystem appear to be driving this trend.

Chennai is a much more cost-efficient city than Mumbai; moreover, it produces an equally good talent pool as Mumbai, according to Mr Amar Chintopanth, Chief Financial Officer & Executive Director, 3i Infotech.

The people-intensive outsourcing sector in India is facing immense margin pressure due to the global financial crisis. This has prompted these companies to reduce costs on every front, analysts say.

“House rentals in Chennai are 40-50 per cent cheaper than Mumbai. Moreover, real estate (for outright sale) in Chennai is 30-40 per cent cheaper than like-to-like property in Mumbai,” said Mr Chintopanth.

In terms of concentration, the top five cities – Chennai, Bangalore, Mumbai, Pune and Gurgaon – account for 55.9 per cent of the total delivery centres of ITeS-BPO companies. Like the previous year’s study by Dun & Bradstreeet, the current one too shows that Tier-II cities are making their presence felt in the ITeS-BPO industry.

More Stories on : Outsourcing | Outlook | Tamil Nadu

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