The Hindu Business Line : `Domestic BPO market to grow 60 pc in 2005-06'

MOVE over Sam, it is time for Shyam to ride the next business process outsourcing (BPO) wave. After exports, the domestic BPO market is now set to take off in a big way, and grow at an estimated 60 per cent to touch about Rs 4,200 crore in 2005-06.

"The domestic BPO business is expected to grow at 60 per cent to clock Rs 4,200 crore during 2005-06 compared with Rs 2,640 crore in 2004-05. As much as 60 per cent of this would be call centre work. Other activities include HR and finance and accounting operations," Nasscom's Vice-President, Mr Sunil Mehta, told Business Line here.

The domestic BPO business is expected to employ close to 50,000 people in 2005-06, he said. In terms of revenues, the market had grown 85 per cent in 2004-05, from Rs 1,425 crore in the previous year.

"Enterprises have begun to realise that the call centre work is not their core competence and that it is easier and more efficient to outsource this work. Moreover, the growth of exports have helped BPO and call centre companies attain economies of scale and understand business," Mr Mehta said.

Although the domestic pie is still miniscule compared to massive BPO exports of $7.3 billion (Rs 32,850 crore) estimated for 2005-06, the high rate of growth back home combined with lucrative deals — such as the one announced by Bharti last year — is prompting players to actively look at the domestic opportunities.

Earlier today, Spanco Telesystems announced it has secured a five-year outsourcing contract worth Rs 5 crore for its domestic call centre operations under the brand name `Sparsh' from the Delhi Government. The contract involves setting up a voice and Web-based public grievance management system and providing contact centre services. Sparsh would manage Citizen Relationship & Grievance Management System (CRGMS) in Delhi.

In August last year, telecom major Bharti had announced a Rs 1,000-crore deal with four business process outsourcing companies to outsource its call centre operations for the next 4-5 years. The deal signed with IBM Daksh, MphasiS, TeleTech and Hinduja TMT envisaged setting up contact centres in each of the four zones of the country. The same month, MphasiS BPO, formerly MsourcE, forayed into the domestic business process outsourcing market with a multi-crore, multi-year order from State Bank of India.