Contact Center Business: The Making of an Industry

Year 2000-01 will be remembered as the year of the contact center boom in
India. While the industry is yet to mature into an organized industry, too much
hype is forcing many big companies and entrepreneurs to actively look at this

  • In the year 2000-01, the offshore outsourced call centers in India did a
    business of Rs 390 crore, according to Voice&Data estimates. This does
    not include the captive call centers of multinationals or the domestic
    outsourced call centers. The domestic industry is of the order of Rs 45
    crore, according to our estimates.
  • By the end of the year 2000-01 (31 March 2001), there
    were about 7,500 people working as CSRs in offshore outsourced contact
    centers in India, in about 4,000 live seats, across close to twenty contact
    centers. This figure also does not include people working in captive
    multinational call centers like that of GE.

  • The per hour rates varied from as low as $5 per seat per
    hour to $11 per seat per hour for web/e-mail support. Voice, of course,
    fetched a higher rate starting from the lowest of about $11 per seat per
    hour, to about $19 per seat per hour, a few exceptions notwithstanding.

  • Primarily there were three types of companies who are
    active in this market–corporate houses, professional setups funded by VCs;
    and small/medium business backed contact centers. About 80 percent of the
    companies fall in the last category.

Contact Centers in India
CompanyWeb siteType of OperationPartnerLocation
Convergys* Fully-ownedGurgaon JVTatasNaviMumbai JVeFundsNavi Mumbai JVTracmailNavi Mumbai
Digital SubcontractTracmailNavi Mumbai
Precision Response SubcontractMotifAhmedabad SubcontractVcustomerDelhi, Mumbai
  • The corporate houses have big plans and with a few
    exceptions like Global, Hero and Phoenix, not many have begun. The ones to
    watch are Jindal Transworld and HDFC-TCS promoted Intelenet.

  • The professionals are the ones that are doing brisk
    business. Major names include Spectramind, Daksh, Transworks and Tracmail.
    All of them started with e-mail/web chat based support and a few are now
    entering the voice business as well. Today, these companies account for
    about 70 percent of the business to India.

  • Many small/medium companies who entered the business and
    thought of competing on India’s strength–cost–alone are in bad shape.
    The reasons behind the failure of many of these companies are three-fold.
    Wrong approach, voice-only call centers, and the perceived lack of
    scalability of their facilities. Many small businesses were promised
    business from overseas clients by the vendors and depended too heavily on
    them for business, which did not happen. The second major reason was that
    voice was perceived to be a low-tech and high revenue generating business.
    Most small companies entered the business with voice call centers. By doing
    so, they were taking two risks. One, they were entering a high cost (both
    capital and running) business. Two, they were trying to compete with an
    industry (the US call center industry) that is fairly established over the
    last four decades, has brands, and has set processes. The one advantage they
    had–cost–carried them till some time. But as the US recession began and
    many of the US call center companies started coming to India, that one
    advantage was gone as these companies could also offer lower prices. Third,
    most small businesses began with 100-seat call centers without provision to
    expand. It was very difficult for them to convince clients about

  • The most significant change that has happened in 2000-01
    is driven by the US market slowdown. That has made cost extremely important.
    India, being a cost saving destination, many US-based contact center
    companies are setting up their facilities here. While Sitel, West
    Telservices, and Stream are already here, Convergys is apparently setting up
    a big facility in Gurgaon.

  • Till now, most of the call centers are being set up in
    the Mumbai and Delhi region. While Navi Mumbai is the hot location in
    Mumbai, Gurgaon and Noida are the places where most contact centers are
    coming up.

  • Indian companies today offer only a handful of services.
    While most of the e-mail/chat services are for first level tech support, a
    few of the professionally set-up companies also handle general e-mail/chat
    based queries from dotcom companies. In voice, it is invariably catalogue
    marketing and/or cold calls for basic information acquisition.

  • Despite rising volumes, the real outsourers like the
    banks and telecom companies are yet to decide in favor of outsourcing to
    India. There are two worries. One is the capability of Indian companies. The
    other is the question of trust. Both are equally

  • Real integrated contact centers with all channels fully
    blended and facilities like co-browsing are hardly existent. However, quite
    a few professional companies like Daksh and Transworks are deploying such
    infrastructure in their new facilities.

  • Out of the fifty odd contact centers in India, only three
    (24/7 Customer, vCustomer and Transworks) have applied for COPC
    certification for quality. And only 24/7 has ISO 9002 certification.

  • Skilled manpower shortage is going to emerge as a major
    problem for Indian call center companies in a few months.

  • There are various lobby groups that are misleading the market. Some of the
    projections are being inflated and being managed by people who do not
    understand the ABC of this business. This year, it is expected that Indian
    entrepreneurs will learn from the mistake of those who have run into bad
    time. Else, there will be a painful transition period.

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