India remains outsourcing favourite, says survey

Posted on October 1, 2007 / 16 Comments

BANGALORE, India (AFP) — India remains the favoured technology outsourcing destination, an industry report said Sunday, amid concerns a rising rupee and soaring wages would blunt the country’s competitive edge.

A study by industry publication Global Services and investment advisory firm Tholons put the Indian cities of Chennai, Hyderabad and Pune at the top of a list of 15 emerging outsourcing destinations for global companies.

Kolkata at number five and Chandigarh at number nine were the other two Indian locations on the list, which contained three Chinese and two Vietnamese cities as well.The three hot cities for outsourcing from China were Shanghai at number eight, Beijing at 10 and Shenzhen at 13. Ho Chi Minh City and Hanoi were put at number six and number 12.

Cebu in the Philippines came in at number four, the Sri Lankan capital of Colombo at seven, Cairo at 11, Buenos Aires at 14 and Sao Paulo at 15, the study’s sponsors said in a statement released in Bangalore.

The list is based on criteria such as scale and quality of workforce, financial infrastructure, risk environment and quality of life.

But it does not include established outsourcing locations such as Bangalore, the New Delhi capital region, Manila, Mumbai and Dublin that have had a decade’s headstart.

Costs are surging in the prime cities in India, which has earned a reputation as the world’s back office, as property values and rentals rise and wages increase at an annual pace of more than 15 percent amid a shortage of skilled employees.

Indian outsourcing firms are also feeling the pinch from an appreciating rupee, which dents dollar-billed earnings, forcing them to cut costs by expanding to less expensive locations.

“With the demand-supply gap widening, newer tier II cities will play a critical role in re-engineered globalisation models,” said Tholons chairman Avinash Vashistha.

“Destinations will need to provide greater level of cost effectiveness and operational efficiency.”

India’s outsourcing companies have thrived by winning work from companies in the US and Europe that sought to tap the country’s low costs and large employee pool by handing over jobs ranging from answering customers’ calls to risk management and financial analysis.

Pure-play outsourcing firms account for about 10 percent of the 50 billion dollars in revenue logged in the year ended March by the entire information technology industry, which also includes software giants such as Tata Consultancy and Infosys.

16 Comments

M Sabbir
October 1, 2007, 3:22 pm
Does the report say anything about Dhaka? It is a good choice for an investor to start a profitable BPO. My humble opinion is it is better than most of the Indian cities stated.
Mukesh Shetty
October 2, 2007, 9:18 am
Dhaka can be a good spot for BPOs if the investors do not mind travelling in boats half of the year and spending half of their investments in bribes to brown sahibs.
samarajiva
October 2, 2007, 10:29 am
Please look at the Boradband benchmark data at http://www.lirneasia.net/projects/benchmarks/.

Do you not think that leased lines prices and ease of obtaining them will have to be improved if Dhaka is to become an attractive BPO destination?
M Sabbir
October 2, 2007, 11:53 am
Thx. That was a real eye opener. Which operator offers these rates?

Any idea why leased line prices are so high in B’desh? The figures look too illogical. What is $ 58 in Pakistan is more than $ 30,000 in B’desh. I cannot think of any other commodity that shows such a wide price variation. Aren’t the laws of demand and supply applicable to the leased line market?

I wonder why B’desh, a country that has been taking giants steps towards bridging the digital divide in the last few years have not taken this fact into account.

On a lighter note, I guess the broadband users would have preferred to be remained as East Pakistan instead of fighting for independence in 1971. If so they could have paid $ 58 for something they now pay $ 30,000 .
Lara Alawattegama
October 2, 2007, 3:40 pm
The leased line rates listed for Bangladesh in the report are those that are offered by the Bangladesh Telegraph and Telephone Board (BTTB)
http://www.bttb.net/
The tariffs are available online.

The leased line rates noted for pakistan are those offered by the Pakistan Telecommunication Company Limited (PTCL).
samarajiva
October 2, 2007, 3:51 pm
The laws of supply and demand operate in monopoly markets but do not yield low prices and high quality

Is Bangladesh not one of the least liberalized markets in the world? The recent policy announcement on international long distance telephony appears set to continue this status.

I am afraid Bangladesh will not be creating jobs and exports in the BPO industry for some time.
M Sabbir
October 2, 2007, 4:24 pm
Thx but what about these news? Don’t this news prove in spite of the leased line costs, which might be higher, BPO market in B’desh is booming. Isn’t it?

Bangladesh ready to enter the BPO market

The South Asian nation of Bangladesh is ready to make its foray into the contact center and BPO market, according to Gartner Group consultant Naila Chowdhury.

Chowdhury, a former director of mobile phone company, GrameenPhone, presented the keynote paper at the Call Center and BPO: Opportunity for Bangladesh seminar, jointly hosted by The Bangladesh Association of Software and Information Services (BASIS) and Junior Chamber International (JCI) Bangladesh. In her presentation, Chowdhury said this is the high time for beginning of a new industry, which might create unlimited job scope for educated young people with IT literacy.

http://callcentres.net/CALLCENTRES/LIVE/me.get?site.sectionshow&CALL2016

New Bangladesh medical contact center

Bangladesh mobile phone company GrameenPhone has joined with Telemedicine Reference center Limited (TRCL) to launch an electronic health information and service known as Healthline.

The new interactive telephone consultation service will be open to all GrameenPhone subscribers and offers advice from a licensed physician who will work from a medical contact center. The center will initially be able to take 15 calls at any one time although it will be able to increase its capacity if needed.

The contact center will be able to dispense both emergency and non-emergency advice and doctors will be available to take calls 24 hours a day, seven days a week. Subscribers will also be able to find information on various drugs and pharmacies, on medical facilities and the doctors attached to them, and results from laboratory tests and recommendations.

http://callcentres.net/CALLCENTRES/LIVE/me.get?site.sectionshow&CALL2203
samarajiva
October 2, 2007, 9:01 pm
Seems like it’s a domestic BPO that will be served by Grameen, not BTTB.

If you want export of services, you need cheap and reliable international connectivity. That Grameen cannot give.

Please see the following for what it takes:

http://www.lbo.lk/fullstory.php?newsID=1803905964&no_view=1&SEARCH_TERM=24 and
http://www.lirneasia.net/2006/09/baseline-sector-analysis-of-the-bpo-industry-in-sri-lanka/
Doanld Gaminitillake
October 2, 2007, 10:02 pm
Dear Sabbir

can you educate me on one area?
Other than voice — does these licensed physician use a computer to communicate with its subscribers?

do they use English or Bengali?

Donald
M Sabbir
October 3, 2007, 8:04 am
I do not know which language they use.
Monsur
October 4, 2007, 10:27 am
Those licensed physician of GrameenPhone Telemedicine use Bangla langauge. FYI.
Jahangir
October 4, 2007, 2:40 pm
Bangladesh is taking gigantic steps on the way to bridge the digital divide though it is not easy task. The population is large and the key priority of the state is to feed the hungry millions than giving them computers. However, in spite of that many developments takes place in the key cities. It will not take long for Bangladesh to beat India in IT. Job market in IT in Bangladesh is booming as it was never before.
samarajiva
October 4, 2007, 4:51 pm
Jahangir:

How are the prices and quality of the broadband connections you can get in the main cities? Are you satisfied? If not, do you have alternative suppliers to go to?
Floyd Buenavente
March 10, 2008, 6:51 am
Interesting but I’d rather outsource to the Philippines though, their english is way much better.
TAZUL ISLAM
December 2, 2008, 10:23 pm
Dear Sir,
We are from Dhaka , Bangladesh. .
Highly interested to work with your esteemed company for receiving firm order for DATA ENTRY or DATA PROCESSING WORKS from USA , CANADA or EUROPE
The works will be done in competitive price in Dhaka , Bangladesh and will be of good quality
Kindly place some small order on trial or send us details of your works if any .
With kindest regards.

Tazul Islam
Dhaka, Bangladesh
Tel : 880-2-9332749
Fax : 880-2-9330758
Email : seenlin@hotmail.com
TAZUL ISLAM
December 12, 2008, 6:10 pm
Dear Sir,
We are from Dhaka , Bangladesh ( South Asia )
We are interested to establish business contact with Buyer or Out Sourcing Company of Data Entry Works of USA , CANADA or EUROPE or ANY OTHER COUNTRY who are interested to place order or like complete the Current Data Entry Works from Bangladesh in competitive price maintaining good quality.
With kindest regards.

Tazul Islam
Chemico Marketing Company
Dhaka, Bangladesh
Tel : 880-2-9332749
Fax : 880-2-9330758
Email : chem065@yahoo.com