Domestic call center revenues to exceed Rs. 8500 crore: Dataquest survey

DQC News Bureau

In a first of its kind study of the domestic call center industry conducted
by Dataquest, the magazine estimates the domestic call center revenues will grow
at 65 percent in the current fiscal to touch Rs. 8,500 crore.

The survey, based on a detailed study of the captive as well as third party
call centers, says the growth in the domestic call center industry will
accelerate to 65 percent, up from 42 percent recorded in the previous year.
(This growth rate is about twice the growth rate recorded by the Rs. 37,800
crore BPO export sector in 2006-07.)

The industry posted revenues of Rs. 5,200 crore in 2006-07 with the captive
call centers (centers operated to service company's own clients) contributing
nearly 70 percent at Rs. 3,598 crore. The outsourced call center industry (those
servicing the needs of third party clients) posted revenues of Rs. 1,602 crore.
Of this, the organized players (classified as those employing more than 200
people) contributed to Rs. 1,097 crore while the revenue from the unorganized
players added to about Rs. 505 crore.

The domestic call center industry employed over 280,000 agents at the end of
December 2007 as per the Dataquest survey. Of this, the captive call centers
employed 130,000 agents, while the outsourced industry employed more than
150,000. According to the survey the Top 10 outsourced players employed 71,645
people.

In Dataquest's rankings of the outsourced players, Intelenet Global Services
took the top spot with revenues of Rs. 137.5 crore in 2006-07. Aegis BPO
Services and Infovision ranked second and third on the Dataquest list with
revenues of Rs. 132 crore and Rs. 119 crore in 2006-07 respectively.
Interestingly, the top 10 players contributed Rs. 749 crore or 47 percent of the
outsourced industry size. The Top two players have a good mix of clients from
the telecom and banking and financial services industry (BFSI). However, the No
3 player, Infovision has a predominantly banking clientele with 14 banks
including HSBC, ICICI Bank, American Express and ABN Amro being serviced by it.
Mphasis, HTMT and Magus occupy the next three slots at No. four, five and six
with revenues of Rs. 80, Rs. 65 and Rs. 58 crore respectively.

According to Dataquest Chief Editor Prasanto K. Roy, "Government and
citizen services are growing rapidly, and this presents a high potential market
in the coming year. As the market enters a phase when players will have to
rapidly scale up, the industry needs to focus on attracting, retaining and
developing manpower."

Telcom and Banking sector: the big outsourcers

The Dataquest study says that the telecom and the banking and financial services
industry (BFSI) players, who are the big clients today, together accounting for
80 percent of the domestic outsourced call centre business. Almost all the
telecom major players — Bharti, Vodafone, BSNL, Spice and Idea have outsourced
their call center services. Leading players like Vodafone and Airtel have spread
themselves across the BPOs, with at least five of the top ten call centres
having these two on their client list.

While telecom players are outsourcing largely inbound customer service, the
BFSI segment prefers to keep customer service in house only giving out
telemarketing services — a mix of cold calling, sales queries and loyalty
selling. Predictably, it is the private sector banks that have taken the lead in
outsourcing with ICICI Bank, HDFC Bank, Citibank, ABN Amro, HSBC giving out a
lot of business. But the survey notes that India's largest bank, State Bank of
India, too has begun outsourcing recently.

The Dataquest survey reveals, almost all the large banks today have fairly
centralized call centers that employ in thousands, and it is unlikely that they
will let go of their core banking processes for reasons of confidentiality.

Retail, travel, hospitality and healthcare to drive future domestic call
center growth

The Dataquest study predicts that several BPO export players including
Genpact, vCustomer and Teleperformance will also begin to focus on the domestic
opportunity to shore up their performance. The new domestic call centers may
however, be based out of towns like Bhubaneswar, Durgapur, Pondicherry, Indore
and Chandigarh.