Domestic BPO Reality Check!

Three years back, a high-profile board meeting was in place at Intelenet
Global. There was much discussion and deliberation on the future scenario of the
industry and the course the company must adopt to mitigate the uncertainties
arising out of global ups and downs. Back then Intelenet Global was majorly into
providing voice-based customer services to international clients. The margins
were good but the risks were high, an economic slowdown in US or a domestic
currency rise could have a negative impact on the companys top line or
bottom-line. Hence, the meeting was convened to chart out a preemptive course of
action.

Among the many suggestions that were thrown up that day, a big foray into the
domestic industry was the most interesting one. The reason is not hard to guess.
Till then the domestic BPO industry was considered too complex and murky for any
serious and organized player to make any headway. There were a few companies
like Magus, Infovision, Andromeda, Customer First, who were functioning in the
industry that could be labeled as organized sector. But, the small mom-pop BPO
shops or what we call as the unorganized sector cornered the larger chunk of the
domestic BPO market. Big companies, and especially international BPO companies,
were loath to enter the market because of the lower margins and haphazard market
dynamics. Bill in Dollars and pay in Rupees was the simple mantra for success.

In light of this scenario, when Intelenet Global announced the acquisition of
domestic BPO company Sparsh; quite a few were taken by surprise. Suddenly, the
term domestic BPO was quite highly debated. Quite many analysts hailed the foray
by Intelenet Global, while a few predicted a gloomy scenario. But then the
unthinkable happened; the US economic juggernaut came to a halt and the domestic
currency soared to touch the 40 Rupee per Dollar mark.

Suddenly, domestic became the buzzword. Companies that were completely
focused on international market suddenly were all at sea. Meanwhile, others like
Intelenet that had made the shift earlier could take it easy. Even we were
surprised by how well the domestic shift paid off, admits a senior official of
Intelenet.

The upheaval in the global economy has only strengthened the case for the
domestic industry, including that of BPO. Earlier this year Dataquest had come
out with a special issue on the industry, wherein we had outlined the emergence
of the industry, the challenges faced and profiled the top-ten players. Keeping
in mind the fast-changing dynamics of the industry, we are bringing out a fresh
issue on the industry that highlights the progress made by the industry, a sort
of health dossier and the number of companies that we profile has increased to
sixteen instead of the top ten.

Trying Times?

Even though, there has been much talk about the high-growth potential of the
domestic industry, the mood on the ground is pretty somber. Talking to a
majority of the industry players, one can feel that the brimming exuberance that
was evident till some months back has been replaced by cautious optimism. Till
the GDP was growing at a healthy 9% with the stock indices touching the heavens,
domestic BPO companies were riding the crest. But the overall dip in the
economic scenario has marginally dipped the sentiments.

Though there is no a direct relation of the overall dip in the global economy
with of the domestic BPO sector, there are some real concerns. The biggest thing
that is troubling the growing industry is that the much-required capital for
expansion has become dearer, as the interest rates have gone up significantly
over the last few months. Since raising money through equity markets is not a
viable option now, many companies have put on hold their expansion plans. The
companies are also impacted by the rising power and real estate costs,
especially those functioning out of the tier-1 & and -2 cities like Magus and
others.

The other big bane is also the fact that the domestic BPO industry is still
largely voice-based and into customer retention and customer management. Large
banks like ICICI and SBI run much of these captive call centers, while the
telecom side is represented by Reliance and BSNL. Even so, the revenues of the
industry as a whole have grown by a healthy margin of 65% over last year,
touching Rs 8,600 crore. Of this the captive call centers of the banks and the
telecom players still account for the lions share of the pie, though slightly
down over last year. The organized industry has also grown marginally and
currently accounts for around 24% of the market size, the rest being taken up by
the unorganized sector.

Nonetheless, opportunities await BPO firms in providing specialized services
to newly emerging industries like retail, fashion or automobile segments.
Services that have significant scope for growth are market research, accounting
& inventory, and SCM. There is growth potential from two ends in the domestic
market, basically from MNCs looking to expand their presence in India and
requiring the same systems and processes they have elsewhere; and on the other
end there are the Indian companies with global aspirations who use the market as
a testing ground and want to provide a global experience in the Indian market.
Keeping in mind these scenarios, the good times are not yet over for the
domestic industry per se.

Organized Vs Unorganized

Though the unorganized sector accounts for 11% of the overall marketshare,
it is still a huge number. Most of these are small call centers that are
operating out of small towns and cities providing marketing services for DSAs
associated with banks and telcos. Most of the unpolished calls that one gets
these days selling credit cards and personal loans, usually originate from these
small call centers.

Most of these call centers function on totally cost arbitrage basis,
providing services at much below the market rates. While the standard billing
rates in an organized company is based on per seat basis, the smaller
companies are ready to work on a variety of models, that is more inclined
towards variables or incentives. The average realization per person is still
around Rs 15,000-20,000 per month, dipping slightly due to the increase in cost
overheads.

But as Intelenet did in 2005, a lot more organized players are making strong
moves in the domestic space. A big indication of this shift is the recent
announcement regarding the merger of the domestic BPO business of Spice
Televentures and Spanco Telesystems. According to reports in the media, the
joint venture, touted as Indias largest onshore domestic BPO, is targeting
revenues of Rs 500 crore by the year ending March 2010. As of now the company
employs around 10,000 people and is expected to grow to around 15,000 by the
financial year ending March 2009. The JV will see the merger of three leading
domestic BPOs in the onshore space, comprising Omnia BPO Services (a Spice
Televentures subsidiary) and Bharat BPO (an existing JV of Omnia and Spanco
Telesystems) and Spanco BPO Services.

Interestingly, Spanco was also involved in the first big domestic M&A Sparsh
(the BPO outfit acquired by Intelenet in 2005) was a subsidiary of Spanco. Other
leading BPO outfits like Firstsource, HTMT, and Genpact are also increasing
their India business by eyeing greater revenue and opening more centers in the
country. ICICI-promoted Firstsource had announced that it intends to ramp up the
domestic revenue share from 4% to 10%.

Touching Hinterland

Compelled by the changing dynamics, domestic BPO players are looking at
heading toward tier-2 and -3 cities. Companies like Firstsource have taken
innovative measures and set up operations for the domestic market in non-metros
like Trichy, Kochi, Vijaywada, Hubli, Indore, etc. The company is also reaching
out to cities like Jalandhar and Siliguri. MphasiS BPO as well has been looking
at tier-2 cities for growing its domestic BPO. In fact, according to reports
MphasiS is also looking at entering the rural parts of the country to tap the
largely unaddressed workforce in the next three to four years. Another new
entrant into the domestic business, Genpact, is also looking inwards.

Intelenet also plans to increase its India presence by opening more
facilities in northern India, especially in Punjab where it already has a center
in Mohali. Aegis BPO has recently opened a center in Lucknow and has set aside
Rs 480 crore for business expansion in India.

The biggest challenge faced by the companies when they move to rural areas,
other than the infrastructure one, is that of finding employable workforce.
While there is no shortage of people in the smaller locations, there are severe
gaps in terms of skill levels, and companies need to spend significantly on
training. Yet the results are beginning to show, with BPO companies moving to
places like Jhansi, Satna, and Ranchi.

In the End

It goes without saying that specific triggers for heightened outsourcing
differ across verticals. While deregulation, massive growth and entry of new
players drive outsourcing among telecom operators, severe competition and
widespread adoption of IT are enabling growth in the banking sector. Meanwhile,
the spread of e-governance can also have a positive impact on the industry, as
the government is also a big user of IT. A good case in point is that of the way
Indian Railways, specifically IRCTC, used BPO services to reach out to the
people. Various government agencies are also looking at either setting up or
outsourcing essential services like passport services (like TCS) or managing
Police helplines (with Spanco). Thus, the government sector could be a big
driver for the market.

On the flipside, till now services outsourced by the Indian companies are
largely limited to low value, high volume, back office jobs and customer support
activities. Managing rapid growth while maintaining competitive costs and
quality will be critical to the growth of BPO service providers. Building and
developing specialized services and solutions that provide greater value will be
a key challenge for vendors to sustain profitable growth in the long term.

Gradually with the rise in business complexity, high volumes and internal
issues there will be a shift toward value-addition. As the business volumes grow
organizations will be forced to focus on their core activities, hence
de-coupling all non-core, non-critical processes for outsourcing. This will
surely benefit the BPO companies.

In the coming year, there could well be an upsurge in M&A activities as large
international BPOs move strongly into the domain and intensify competition in
the BPO market. With a large number of small and mid-sized vendors focused on
the domestic market, inorganic growth will be an attractive option for the
international players looking to build scale rapidly.

Coming back to the point we started from, domestic BPO operations contributes
close to 30% of overall revenues at Intelenet. Today, the company is on a firmer
footing, when compared to all the international BPO outfits that are caught in
the economic maelstrom. India might not be immune to the global economic
pressures, but one thing is sure, that the billion plus population while it
presents a big problem also spells a big opportunity. With a burgeoning market
hungry for goods and services, there is little doubt about the growth potential
of the domestic BPO industry. As CK Prahlad rightly stated, the profit lies at
the bottom of the pyramid.

Shashwat DC

shashwatc@cybermedia.co.in

Aditya Birla Minacs : All in the Family

The company is busy revamping its brand after the recent name change

Dev Bhattacharya, CEO

While North America still remains the bread and butter for the company,
Aditya Birla Minacs is one more giant which has started looking seriously at the
local market in India to expand its business. While critics would harp on the
fact that the client list mainly includes only other Aditya Birla group
companies, the moot point remains that these are some of the biggest names in
India Inc. And piggybacking on the parent group to grow its business is no
crime.

Minacs has been doing domestic work mainly for the Aditya Birla group
companies like Birla Sun Life Insurance and Idea Cellular With automotive being
one of Minacs strongest verticals, and fears of US slowdown seeming to grip the
automotives operations, there seems to be increased focus on domestic
operations.

With a strength of over 4,500 people in the domestic operations and growing
steadily, the company is well on track for making a headway in the local market.
The major service lines have also diversified to include HR, administration,
business and corporate research, document management, integrated marketing
services, data management services, etc. Growing non-voice business in areas
such as data analytics could be the next logical step for Minacs. With more than
three-forth of the revenue coming from voice now, this could help in an image
makeover from being a mere call center.

Aegis : M&A King

Aggressive movement on this front made it one of the names to reckon with in
the domestic market

Aparup Sengupta, MD

Aegis made its domestic focus clear right from the beginning when it acquired
Customer First.This gave access to southern and eastern India, and Orion Dialog
provided inlet to the north Indian market. The acquisition of Gurgaon based
Global Vantedge in February 2007, followed by the acquisition of Teletech
Services India in November of the same year, emphasized its domestic ambitions.
The same year saw Aegis buying Kolkata-based Stesalit Infotech, which added
medical transcriptions to its domestic offerings.

The aggressive movement on the M&A front, positions Aegis as one of the
strongest players in the domestic market, with a focus on both organic and
inorganic growth. India gave Aegis three times more business in FY 08 as
compared to the previous year. It now accounts for over Rs 820 crore out of the
total annual revenue of around Rs1,330 crore.

Around 80% of the domestic operations are in the voice category. Aegis has
also repositioned itself as an end-to-end customer lifecycle management company
and a virtual retail player. The company sold insurance policies, banking
products, etc, earning over Rs 2 crore per month and generating revenues of Rs
25 crore in the process. The pilot run was conducted in Delhi, Bangalore,
Ahmedabad and Kolkata and helped in enhancing its horizontal services.

Aegis also managed to cut down its attrition rate drastically by adopting an
in-house curriculum called Aegisace.

Andromeda : Insuring Growth

Uniquely placed providing inbound and outbound services, the company recorded
good growth

Elizabeth Jacob, Director

On the operations side, the company grew at 77% during FY 08. While other
players swore by inbound customer care while doing telemarketing for clients,
Andromeda continued to provide both inbound and outbound services.

The advantage of being a complete end-to-end player clearly reflected in the
strong growth. Though Andromeda was earlier present in the insurance, vertical
its presence got bigger during FY 08. It signed up with big players like HDFC
Standard Life, Tata AIG, ICICI Prudential, UTI Mutual Fund, and so on. Not
surprisingly, while most others primarily depend on the telecom services
industry for majority of revenue, BFSI became an equally strong business for
Andromeda, with 47% coming from telecom, while 29% came from banking.

In the telecom space, the company continued to consolidate its footing in the
outbound services for the existing players. Amongst all the service lines that
the company is into customer service, collections and back end - telemarketing
contributed maximum at 55%.

As the business expanded, Andromeda grew by setting up four new offices, two
in Mumbai and one each in Chennai and Bangalore. The seats increased by over
1,500.

EFFORT BPO : Effort Pays Off

A new entrant, the company trebles its revenue thanks to an exclusive focus
on the domestic market

Rajneesh Sarna, Director

Direct positioning and clear focus has won many clients and partners for
Effort BPO. The major verticals targeted by Effort are financial services,
telecom and insurance sectors.

The company registered a strong growth of 78% in FY 07 in its domestic
operations. The revenue for the same year was around Rs 12 crore, which is
expected to more than treble to reach Rs 50 crore in the current year.

A lot of these jumps can be attributed to recent expansion of the client
base. The year 2007 was an active year for Effort, that saw it acquiring clients
in all segments.

A leading domestic mutual fund company outsourced their outbound telesales
operations to Effort and a prominent insurance company gave them their contact
center work in a long-term deal. There was also some movement in the telecom
vertical as the company grabbed two major deals from leading telecom players in
the last year.

Effort has also been expanding its service lines horizontally and has
established multiple points of contact (both voice and non-voice). They now
provide services like tele-surveys, abandon rate monitoring, and average handle
time follow-ups.

Currently operating from four locations in India, Effort plans to spread its
operations and up-scale in the existing facilities. It expects a 6,000 plus
employee base in the domestic business by the end of this year, and is also
eyeing the domestic ITeS in a big way.

FIRSTSOURCE : Record Growth

Hiring 3,000 employees in spite of the industry downturn, reflects the
confidence of the company

Ananda Mukerji, MD and CEO

Firstsource registered a staggering domestic growth of around 330% in FY 08,
with revenues jumping fromRs 31.7 crore in FY 07 toRs 134.45 crore in FY 08.
Major revenue (80%) came from BFSI, healthcare, telecom and media segments.

Firstsource ventured deeper into the media segment adding DSL, DTH and cable
productsinstallation and technical support, network team scheduling, and ticket
management.

The story continued in delivery presence too. Firstsource has 20 facilities
in India, encompassing cities like Hubli, Vijaywada, Indore, Kochi and
Puducherry.

Top clients at Firstsource contributed around 51% of the total revenue in
2006-07, which dipped to around 37% in the current financial year adding
diversity to client portfolio. Firstsource hired around 3,000 employees in spite
of the industry downturn in the year 2007-08. Its total employee strength
(domestic) is now at around 18,500. There is a general expectation of further
recruitment, showing a positive trend.

Firstsource started domestic operations only in the year 2007, its client
portfolio boasts of major names across verticals. Airtel and Vodafone in the
telecom sector continue to be the growth drivers for the company. BFSI boasts of
Lloyds TSB, and healthcare has Aspen Valley hospitals and Life Point hospitals
in the list.

Though recession affected operations, but not diminished the growth to a
great extent.

HTMT GLOBAL SOLUTIONS : Healthy Growth

By adding new verticals and service lines, it remained a top domestic BPO

Viswanath Rao, Executive VP, Operations

HTMT clocked revenues of Rs105 crore from its domestic operations in FY 08.
That is a growth of around 62% over the previous years revenues, which stood at
Rs 65 crore. The growth is projected to dip to 38% in FY 09 due to the ongoing
downward industry spiral.

The domestic operations of HTMT also yielded a healthy average realization
figure of around Rs150 per seat per hour (subject to process).

While telecom remained the highest contributing vertical this year as well,
its contribution to the overall revenue dipped to 83.6% this year from 92% the
previous year. Insurance, a new vertical for HTMT, contributed around 8% to
domestic operations in FY 08.

Major service lines also remained the same with claims processing, customer
services and billing continuing to be the strong areas. The top five clients
contributed around 93% of the total revenue, with the top-most client alone
accounting for 82.4%.

HTMT has six facilities in India, which accommodate almost 9,300 employees, a
sizable chunk of its total 1,300 plus employees worldwide. While telecom engages
a substantial number of the total manpower, the percentage of employees in the
BFSI vertical showed a nominal increase this year.

It provides services in fifteen Indian languages for forty across verticals.
Domestic processes are becoming more end-to-end as opposed to being purely
voice-based.

IBM DAKSH : Domestically Daksh Too

The merger with the sales team of IBM seems to have helped domestic
operations well

Pavan Vaish, CEO

Last year was an action packed one for the domestic operations of IBM Daksh.
The merger of the sales team of IBM with IBM Daksh, seems to have helped its
domestic operations, despite the floating rumors that IBM was planning to sell
off the company. Together with integrating its tools and operations with its
parent company, IBM also managed to grab some big deals (like Max New York life
India) in the domestic market.

Another major domestic deal which came its way recently was the six-year
outsourcing agreement with Bharti-Airtel for its platinum customers.

IBM Daksh pushed its domestic operations more vigorously during the last year
and set up new centers in Kolkata, Pune, and Vizag. Although overall growth was
slow, the employee strength has been high.

Domestic operations continued to contribute a significant chunk to the total
revenue. Strengthening the domestic focus was a huge $15 mn deal with travel
portal Makemytrip.com, which included people and asset transfer.

As expected, the service lines offered by Daksh in the domestic market
continued to evolve, with customer relationship management and back office
services being the driving areas. IBM Daksh significantly diversified its
capability mapping activities and focused on industry specific offerings for its
domestic clients. On the vertical front, the major revenues in the domestic
market came in from the telecom, BFSI and IT segments.

InfoVision : Looking Beyond BFSI

Tapping new verticals like consumer electronics and telecom has helped it
with a balanced client concentration

Aditya Gupta, President

Even though InfoVision started as a domestic contact center, and has an
offshore operation too, the company has always positioned itself more as a
domestic player. Taking careful steps, InfoVision has completely grown
organically in the domestic space, by testing waters in multiple industries.
While telecom is big for most of the other players, InfoVision draws close to
75% of its revenue from BFSI. Though now it is looking at expanding in telecom
too.

Consumer durables is big for the company and accounts for about 15% of its
revenues. Travel and hospitality too are verticals where InfoVision has
presence. InfoVisionsrevenue grew by over 50% during the FY 08. In the BFSI
space, the company has grown and consolidated its existing business with some of
the top players including Citibank, Standard Chartered, HDFC, ABN, Axis Bank,
Barclays, etc. Besides this, in consumer electronics, LG Electronics is a big
client.

On the client concentration front InfoVision has a pretty balanced approach,
which seems to reflect that dependence on its top client is not very large.
While the top client contributes about 17% to its revenues, the top 5 account
for about 60%.

InfoVision also took steps to expand operations, by adding over 1,500 seats
in Delhi, and at the same time adding about 300-400 seats in Chennai, Bangalore,
and Mumbai offices each Gurgaon is next on InfoVisions expansion roadmap.

Intelenet Global : First-Mover Advantage

Among the first international BPOs to have made a strong foray into the
domestic market, Intelenet is now reaping the benefits

Radhika Balasubramanian, Head, Domestic BPO

Currently functioning out of thirteen centers across seven locations in
India, Intelenet continues to grow its domestic footprint. The company still
maintains a healthy revenue mix of financial services/insurance and telecom,
both accounting for around 90% of the overall revenue.

Intelenet currently has a capacity of 8,200 seats with expansion plans for
20,000 seats by 2009. The company is also offering multilingual services in over
nine Indian languages to its clients.

Notwithstanding all these positive, the company received bad press owing to
some employee misunderstanding with TLs.

Intelenet has been able to command a higher margin in the industry based on
professional services. Little wonder that it keeps winning big accounts like the
SBI deal. On the technology front as well the company has developed proprietary
CRM and technology systems, which can be customized to the needs of individual
clients. The company is also refurbishing its top management team. As part of
the same effort the company announced the appointment of Gayatri Balaji as chief
operating officer of its domestic BPO business for South India.

Intelenet is also working at process improvement and productivity in a
serious manner. The company hopes to marginally increase the seat utilization
rate by the end of this year. It is also looking at evaluating other means of
cuttings costs.

Magus Customer Dialog : Switching to Polygamy

Realizing the negative of over-dependence on a single vertical, the company
is looking at other areas

Shyam Sunder, Director

In many ways, Magus is the grand daddy of the domestic BPO Industry. The call
center came into being in 1989 and from then onward it has charted a course for
itself. The biggest focus of the company from the onset has been delivering high
quality, customer retention services. Little wonder then that the company has
many telecom players as its customerscompanies which are facing a lot of churn
in the marketplace. Over 80% of Magus revenue comes from the telecom sector.

This overt dependence could also be a hassle since most of these companies
are going in for high-profile outsourcing of complete infrastructure and
customer management. Yet, till now, Magus has been able to hold fort. Management
is trying to reduce the dependence on telecom by venturing into newer verticals
like banking and entertainment.

The other issue that Magus faces is its increasing overheads, since the
company has decided to operate out of major cities, instead of venturing into
tier-3 or smaller towns. This might have led to increased pressure on margins
due to increasing costs, like rentals and salary. The only way to mitigate the
same would be to look at smaller towns and cities for expansion.

It remains to be seen, that in this day of consolidation, how long Magus will
be able to hold fort as an independent entity, considering that it is a prize
catch for any serious player wanting to make a big foray into the domestic
market.

MPHASIS : Wooing Big Names

Increased focus vertically and on horizontal lines helped pull in big clients

Ramesh Gudalur, President

While domestic focus remained strong on financial services, telecom,
healthcare and hi-tech industries, MphasiS expanded its back office operations
and service lines horizontally. Its domestic strategy also revolved around
acquiring major players in the banking and telecom segments.

MphasiS cultivated CRM operations and provided multi-layered interaction
services incorporating chat and emails. Last year also saw a move toward
non-voice services like HR, F&A, updating brokerage information and book
keeping. Subsequently it has also gone to places like Ahmedabad, Noida,
Puducherry and Indore to serve domestic clients.

MphasiS also kicked off its domestic business with Airtel; but it has not
only leveraged on increased business from its premier client, it added a few
biggies like Idea and SBI with immense potential to its portfolio too. The share
of domestic operations in the total revenue is thus expected to rise
significantly this year.

MphasiS has decided to cut down hiring by around 50% this year, Though
economic recession is one big reason, it also has to do with the upscaling of
utilization rates in the organization. The average utilization in August was
around 76%, a great move from the 68% a few months back. The company expects
this figure to rise to 79% by the end of this year.

Sources from the organization clearly state that the recession is only going
to further strengthen MphasiS focus on the Indian market.

Optimus Global Services : Negotiating Success

An impressive 92% growth was the result of a strong portfolio and the
companys power of negotiation

Chiranjiv Chatterjee, COO

Experience counts. And in the case of Optimus, a wholly owned subsidiary of
Polaris Software, it is the power of negotiation that came along with the
experience that saw the company double its revenues in FY 08.

Optimus strengthened its portfolio and continued to provide a complete
spectrum of back office services in the banking and financial services sector.

Optimus consolidated its customer base too. Primarily into the BFSI and
telecom space, the top five clients contributing 90% of its revenues. While
BFSIs contribution rose from 70% in FY 07 to 93% the next fiscal, telecom has
gone down from about 10 to 6%. The company very aggressively explored the
insurance vertical too. Strategically, the company looked at getting bigger
deals in this space, that being the next logical step. Telemarketing and
collections remained the dominant service lines for Optimus, Optimus looked at
getting into inbound customer service too.

On the peoples front too, the company almost doubled its headcount by adding
close to 1,600 people, taking the total manpower count to 3,000 plus. As the
team got bigger, Optimus went in for more managerial level people. Optimus had a
new head of operations last year, while a new COO also took charge.

RT Outsourcing Services : Service with a Smile

Helped along by its exclusive arrangements with large companies, RT plans to
focus on RIM too

Sanjeev Kakkar, CEO

It was yet another year marked by big client winsToshiba, Zenith, Western
Digital, HTC, among others. The company recorded a growth of close to 70% during
FY 08, while it continued to have an exclusive arrangement with other biggies
like HP, IBM, Lenovo, Acer, etc.

RT Outsourcing also provides integrated service support (reverse logistics)
for all kinds of electronics including computers, mobile phones and other
consumer electronics like set-top boxes and display devices, amongst others. The
company primarily does customer service (tech and non-tech), telemarketing,
email, web chat, varied back office processing, remote PC support, and web-based
e-CRM services. Technical support services remained the largest contributor with
close to 97% of the revenues.

Other verticals the company has presence in are telecom, BFSI, travel, ISP,
FMCG, and healthcare.

The year also saw the company adding close to 450 employees in its Okhla
center.

In an interesting development, RT also opened a whole new division focused on
remote infrastructure management, both onsite and enterprise. A new person was
taken on board to head this division, reflecting its planned focus on RIM.

Another big deal for RT was its tie-up with SatNav Technologies, a player in
the Navigation and GPS Technology. As the service partner for SatNav, RT
Outsourcing will serve all its customers who own companys GPS Devices. Another
Taiwan-based company Genius appointed RT Outsourcing as its service partner for
India.

Sitel India : Gearing Up!

Strategic growth plans in India will see the company bring in 4,000 more
people in the next two years

Safir Adeni, CEO

The year saw Sitel announce the launch of its operations in the Gurgaon
center. The company is expected to continue its presence here by bringing an
additional 4,000 people in the next two years. Prior to this, Sitel India, had
opened a contact center in Hyderabad too, and there are two other in Mumbai.

The verticals that Sitel serves include technology, ISPs, telco, BFSI, and
travel and retail. The company started way back in the year 2000, but the first
few years lacked direction. It is only after the present CEO, Safir Adeni took
over that the firm got some stability. On the domestic front, Sitel has been
doing pretty well with Indias share having increased from. 0.6% to close to 5%.
Clearly the focus has been to offset the impact of the declining US dollar.

Sitel in India has a list of impressive clients which includes major
financial services institutions, leading BFSI organization hardware
manufacturers, and leading online service providers. The company provides
domestic receirables management/collections programes for large corporations.

Spanco Spice : Integrated Giant

The merger of three companes has helped in the emergence of one of the
largest domestic BPO

Kapil Puri, Chairman

During FY 08, Spice Televentures and Spanco Telesystems and Solutions merged
three existing domestic BPO businessesOmnia BPO Services, Spanco BPO Services,
and Bharat BPO. After selling Sparsh (Spancos domestic call center arm) to
Intelenet Global, it has been operating in a JV with Spice groups Omnia BPO
Services.

Strategically, the new entity has moved its focus to debt collection across
the BFSI space. It added six clients with Citi Group being the largest.
Traditionally, voice-based and contact center services to telecom and governance
clients have been Spancos forte.

In the governance space, the company won some big projects including a
contract from the Orissa Government to roll out a State Wide Area Network across
the state. Spanco, along with ITI will build own and operate a SWAN connecting
30 districts and 284 talukas in the state of Orissa. Spanco also bagged another
Haryana State Electronics Development Corporations system integration project
to connect jails and courts in Haryana through videoconferencing.

The company now has two set ups in Gurgoan and Vashi. Both the facilities a
over 3,200 seats in all. In the next phase of expansion, from 7,000 seats across
10 cities, including Delhi NCR, Mumbai and Kolkata, the company plans to ramp up
capacity to 15,000 seats by March 2010 with a focus on tier-2 and -3 cities,
Targeting revenues up to the tune of Rs 450 crore.

vCustomer : Proposing Value

Strategies for the domestic market worked very well, as clients realized the
value proposition

Sanjay Kumar, CEO

Though a large chunk of vCustomers revenues still came from its
international clients, during FY 08 the company geared itself for the domestic
market in a big way. It not only started selling its homegrown CRM solution
commercially, it also led with the software in the Indian market. The move
showed instant results, with vCustomer adding twenty-eight new customers across
verticals including e-retail, food & beverages, governance, telecom, ISPs.

During FY 08 the company saw overwhelming response from the domestic players
who now, the company believes, have started appreciating their "value
proposition". The company sees better opportunity in India not just in terms of
growth potential but scope to do higher value add.

Some big accounts were added in the food & beverages vertical while in the
governance space the Ministry of Health kept it occupied.

On the e-retail front, e-Bay India was a big deal. It also launched a
multi-channel support service for its online retail customers. However,
insurance and banking, remained the biggest verticals.

About 15% of its revenues came from domestic deals vCustomer opened an office
in Mumbai, with an additional 500 seats. The new center is expected to cater to
both international and domestic clients. This is the companys fifth facility in
India. The company also made some management level changes by getting people
from outside locations.