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Outsourcers will dominate by '09

Source: PTI
March 21, 2005 10:54 IST
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The contact centre market in India is expected to see a major change in the next two years with third party service providers expected to dominate, according to a study by independent analyst firm Datamonitor.

"Just 36% of agent positions in India were offshore outsourced at the end of 2004 with the remainder located mainly in offshore in-house operations of big multinationals. However, by 2007, the tables will have turned in the outsourcers' favour," says Datamonitor.

"By 2007, new outsourced seats will outnumber captive ones by a factor of 10:1 in India and the outsourcers will continue to hold sway going forward. Just 12,000 net new captive seats will be added between now and 2009," the study predicted.

According to Datamonitor, more firms are set to follow the likes of British Airways, Citibank, General Electric and HSBC and spin-off a part or all of their captive operations in India.

Firms that have chosen to lock in shareholder value by tapping into the offshore labour arbitrage model by establishing in-house offshore centres, will look to deliver further returns, either by selling off their captive offshore operations or by outsourcing the processes to third parties, the study said.

According to Datamonitor, over a quarter of a million new call centre agent positions will be added in India and the Philippines through 2009.

Both countries will see substantial growth in call centres now that the US presidential elections are out of the way allowing the United States and the United Kingdom businesses to ramp up their offshore operations.

While India continues to dominate the global offshore call centre outsourcing landscape, the Philippines threatens to poach some activity as its own market grows in strength.

Besides the attractions that India and the Philippines offer western firms in terms of low cost access to highly skilled call centre and back-office staff, the two markets will also demonstrate substantial growth in their domestic call centre markets.

By 2009, close to 100,000 agent positions will be serving the Indian domestic market, while the Philippines will have 21,600 positions.

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