The domestic call centre revenues will grow at 65 per cent in the current fiscal to touch Rs 8,500 crore, according to a study by IT industry magazine Dataquest.
The survey, based on a detailed study of the captive and third party call centres, says the growth in the domestic call centre industry will accelerate to 65 per cent, up from 42 per cent 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 centres (centres operated to service company's own clients) contributing nearly 70 per cent at Rs 3,598 crore.
The outsourced call centre industry (those servicing the needs of third party clients) posted revenues of Rs 1,602 crore. Of this, the organised players (classified as those employing over 200 people) contributed to Rs 1,097 crore while the revenue from the unorganised players added to about Rs 505 crore.
The domestic call centre industry employed over 280,000 agents at the end of December 2007 as per the Dataquest survey. Of this, the captive call centres 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 centres of the outsourced industry size – showing how fragmented the entire sector is.
The top two players have a good mix of clients from the telecom and banking and financial services industry (BFSI). However, the number three 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 number 4, 5 nd 6 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 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 per cent of the domestic outsourced call centre business. Almost all the telecom major players – Bharti Airtel, Vodafone Essar, BSNL, Spice and Idea have outsourced their call centre services.
Leading palyers like Vodafone and Airtel have spread themselves across the BPOs, with at least five of the top 10 call centres having these two on their client list.
However, both sectors appear to have a different approach to the services they are outsourcing. 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, and 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 centralised call centres that employ in thousands, and it is unlikely that they will let go of their core banking processes for reasons of confidentiality.
Dataquest Editor and BPO industry analyst Shyamanuja Das says, "The domestic call centre market is fast evolving but it needs to take some mature steps to minimise growth pangs."
The study predicts that several BPO export players including Genpact, Customer and Teleperformance will also begin to focus on the domestic opportunity to shore up their performance. The new domestic call centres may, however, be based out of towns like Bhubaneswar, Durgapur, Pondicherry, Indore and Chandigarh.
According to Dataquest, McKinsey Global Institute predicts India's disposable household income will contribute to a quadrupling of its private consumption between 2006 and 2025. McKinsey predicts that Indian consumers will spend Rs 6,950,300 crore in 2025. This will lead to opening up of a whole new kind of customer interaction service in areas such as banking, telecom, insurance, travel, electronics and IT.
Within the captives, the emerging story is the public sector versus private sector approach to call centre operations. The study analyses both approaches and points out why although at first glance, the public sector companies seem to be forward looking, it's the private sector that could end up creating domestic equivalents of Genpact or WNS.
The comprehensive survey looks at the evolving metrics of the industry and finds that billing rates are mostly on per person per day basis for inbound work and a mix of per day per person and incentive for the telesales work.
"Today, the average realisation is anywhere between Rs 15,000 to Rs 22,000 per person per month for the outsourced industry," says the survey.
The starting salary in a domestic call centre, which ranges between Rs 4,000 and Rs 7,500, depends on the location with Tier-I cities offering Rs 6,000, compared with Rs 4,500 at a smaller location.
Margins tend to vary according to services but in the organised industry the average is around 15-16% which is lower than the offshore margins. But according to the survey, the margins will grow as the domestic outsourced call centre industry moves into the smaller towns like Durgapur, Pondicherry and Indore.
At least three players on the DQ top 10 list -- Aegis (No 2), Firstsource (Number 9) and Omnia (Number 10) — expect to record three digits growth in the coming year. So expect some interesting changes in next year's list – reason enough to keep watching this space. |
