Tech Mahindra eyes emerging markets for BPO business

With the telecom market booming in the emerging countries, the $935 million Tech Mahindra is not only targeting these markets for its IT services but also for its BPO business.

Sujit Baksi, president, corporate affairs, Tech Mahindra, says, ?The basic aim to come out with the BPO business was to support our existing clients with outsourcing. We have been serving large telecom companies in the UK and US and now we are targeting our existing IT services clients in the emerging markets such as India, New Zealand, Australia and The Philippines.?

Tech Mahindra recently bagged deals with Telecom (New Zealand), Telecom Fiji (Australia) and Botswana Telecommunications Corporation (South Africa) for IT services. According to analysts, the tier 2 and tier 3 carriers, along with MVNOs that want to move their core and non-core functions offshore, will comprise the next wave of growth for Indian vendors in the high-growth telecom carrier process off-shoring market.

Kamlesh Bhatia, principal research analyst, Gartner says, ?Telecom operators are quite reluctant to outsource and usually these deals are small in size. For Tech Mahindra to leverage on the existing clients will be a strategic step to enter the market for business process outsourcing. However, the company has to compete with other regional vendors.?

Harit Shah, an analyst with Angel Broking, says, ?Tech Mahindra, for its BPO business, reported Rs 130 crore of revenues in FY 08, a 822% growth from Rs 14 crore in FY 07. Looking at these, the existing clients may give a gradual push to the company.?

The BPO arm currently has about 4,000 people and about 50% of Tech Mahindra?s BPO revenues come from the UK-based British Telecom. The company also serves a large domestic telecom company with a subscriber base of about 18 million, which is most likely to be Tata Indicom. Baksi adds, ?India has been a focus market as well and we already have a large domestic telecom company with a subscriber base of about 18 million. Our SEZ unit in Kolkata will have about 500 seats for outsourcing processes.?