Telecom boom may ring in mega BPO deals
BPO revenues from Indian telecom players have tracked the exponential growth of the telecom industry
giants, including Bharti Airtel. Outsourcing revenues from the telecom sector in India are set to grow at a CAGR of 31% in the next few years to nearly $2 billion in 2012, according to a study on the potential of the domestic BPO industry by Ernst & Young.
Bharti has been growing at CAGR of 41% in the past two years. The Telecom industry has been adding around 10 million subscribers every month with a subscriber base of 375 million in 2008-09. India’s largest mobile service provider, Bharti Airtel, which played a pioneering role by outsourcing many of its non-core functions in 2005, is changing the way Indian firms have traditionally run business and putting pressure on others to follow suit, the consultancy said in the study. Telecom revenues made up 50% of the domestic BPO revenues at $661 million in 2008.
“This domain (telecom) has already witnessed a couple of large outsourcing deals in recent months and the trend is expected to continue,” said Milan Sheth, partner, Ernst & Young. The trend started in August 2005 with Bharti Airtel signing a $272.2 million deal with four global BPO companies — IBM Daksh, MphasiS, Teletech and HTMT —to outsource its call centres.
The key driver for BPO in telecom is demand for customer care and sales and marketing services, according to the report. Customer service is becoming the key to telecom service providers because it can be a differentiator in the marketplace — more so, because technology is uniformly accessible to all providers.
BPO for telecom is also a huge job creator, employing over 1,22,440 people in BPO firms in 2008 — a number that is set to more than double to 2,94,444 in 2012. After telecom, banking is the biggest employment generator for domestic BPO firms.
According to the figures put out in the report, the banking sector employed around 70,100 people in 2008 and this is projected to go up to 2,25,900 in 2012. The two sectors combined contribute 80% of the domestic BPO revenues — which is tipped to reach $6 billion in 2012.
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