Domestic Market and cost structure of BPO in India and hahaha

Indian Domestic BPO was expected to be USD 18Bn industry in FY2008 and is expected to grow at a CAGR of 35 for the next 4 years becoming a USD 6Bn industry in FY2012

With the emergence of several large proven and well-capitalized vendors outsourcing will continue its momentum It is expected that 3rd party vendorsrsquo market share will increase to 30 in FY2012

Customer care and Sales and Marketing are the two largest business segments and accounts for over 78 of the overall market in FY2008

Banking Insurance and Telecom are the key industry verticals and account for 68 of the overall market in FY2008

Retail Media Entertainment and Healthcare are the emerging verticalsto leverage outsourcing in near future

Indian domestic economy (growth)

Banking sector will grow at 19 CAGR Insurance sector will grow at 12 CAGR Retail at 35 CAGR Telecom at 70 CAGR

Rise of consumerism in India

The shape of the income pyramid of consumers will undergo significant change in the next 20 years

Expenditure on health education transportation and communication will soar

Impact on business As consumer income rises they become more discerning Product Differentiation and Quality of Service will become

critical success factors1048713 Customer support CRM Loyalty Marketing will gain

prominence as key business enablers

Domestic BPO Revenue

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Indian Domestic BPO was expected to be USD 18Bn industry in FY2008 and is expected to grow at a CAGR of 35 for the next 4 years becoming a USD 6Bn industry in FY2012

With the emergence of several large proven and well-capitalized vendors outsourcing will continue its momentum It is expected that 3rd party vendorsrsquo market share will increase to 30 in FY2012

Customer care and Sales and Marketing are the two largest business segments and accounts for over 78 of the overall market in FY2008

Banking Insurance and Telecom are the key industry verticals and account for 68 of the overall market in FY2008

Retail Media Entertainment and Healthcare are the emerging verticalsto leverage outsourcing in near future

Indian domestic economy (growth)

Banking sector will grow at 19 CAGR Insurance sector will grow at 12 CAGR Retail at 35 CAGR Telecom at 70 CAGR

Rise of consumerism in India

The shape of the income pyramid of consumers will undergo significant change in the next 20 years

Expenditure on health education transportation and communication will soar

Impact on business As consumer income rises they become more discerning Product Differentiation and Quality of Service will become

critical success factors1048713 Customer support CRM Loyalty Marketing will gain

prominence as key business enablers

Domestic BPO Revenue

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Customer care and Sales and Marketing are the two largest business segments and accounts for over 78 of the overall market in FY2008

Banking Insurance and Telecom are the key industry verticals and account for 68 of the overall market in FY2008

Retail Media Entertainment and Healthcare are the emerging verticalsto leverage outsourcing in near future

Indian domestic economy (growth)

Banking sector will grow at 19 CAGR Insurance sector will grow at 12 CAGR Retail at 35 CAGR Telecom at 70 CAGR

Rise of consumerism in India

The shape of the income pyramid of consumers will undergo significant change in the next 20 years

Expenditure on health education transportation and communication will soar

Impact on business As consumer income rises they become more discerning Product Differentiation and Quality of Service will become

critical success factors1048713 Customer support CRM Loyalty Marketing will gain

prominence as key business enablers

Domestic BPO Revenue

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Indian domestic economy (growth)

Banking sector will grow at 19 CAGR Insurance sector will grow at 12 CAGR Retail at 35 CAGR Telecom at 70 CAGR

Rise of consumerism in India

The shape of the income pyramid of consumers will undergo significant change in the next 20 years

Expenditure on health education transportation and communication will soar

Impact on business As consumer income rises they become more discerning Product Differentiation and Quality of Service will become

critical success factors1048713 Customer support CRM Loyalty Marketing will gain

prominence as key business enablers

Domestic BPO Revenue

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Rise of consumerism in India

The shape of the income pyramid of consumers will undergo significant change in the next 20 years

Expenditure on health education transportation and communication will soar

Impact on business As consumer income rises they become more discerning Product Differentiation and Quality of Service will become

critical success factors1048713 Customer support CRM Loyalty Marketing will gain

prominence as key business enablers

Domestic BPO Revenue

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Domestic BPO Revenue

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

With the emergence of several large and proven 3rd party BPO players their market share will increase from the current 18 to 30 by 2012

Top 12 players account for 75 of the 3rd party market share

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Key reasons for rapid increase in market share of 3rd party players

With most underlying customer industries growing at between 20-70 per annum there is an increasing realization to focus on the core business while partnering with 3rd party vendors to tackle the non-core operations

Several large 3rd party players with proven delivery experience robust an infrastructure and a referenceable client base

High attrition rates of between 55-65 per annum is putting an enormous strain on management bandwidth of organizations running their captive operations

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

SERVICE LINES

Customer care will grow at CAGR 110

Sales amp marketing at 45 CAGR

HR at 82 CAGR

FampA at 16 Others at 19

Key 3rd party player are Aegis HTMTIBM InfoVision Omnia Mphasis Sparsh

AndromedaDiremInfoVision Kankei Omnia

Cross-DomainHewitt MaFoiTeamlease

Bill Junction Venture Infotek Dialnet Communications

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Growth in verticals

BPO opportunity from Banking sector is currently about USD 380Mn

Expected to grow at a CAGR of 38 to USD 15Bn in FY2012 BPO opportunity from Insurance sector is currently about USD

190Mn Expected to grow at a CAGR of 20 to USD 390Mn in FY2012 BPO opportunity from Telecom sector is currently about USD

660Mn Expected to grow at a CAGR of 31 to USD 19Bn in FY2012

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

BPO opportunity from Travel sector is currently about USD 76Mn

Expected to grow at a CAGR of 40 to USD 210Mn in FY2012

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

CHANGING COST STRUCTURE OF DOMESTIC BPOs ( OF REVENUES)

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Key Elements of Cost Structure of Domestic BPO Players

Personnel costs account for nearly 46 of revenues currently Wage costs have been rising between 10-12 annually in all major cities of India

However with almost all domestic BPOs now moving to tier 23 cities both wage costs and attrition are likely to temper Salaries in tier 23 cities are 60-70 of tier 1 cities and attrition levels are less than 15 per annum

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Telecom amp Connectivity costs account for 8 of revenues Over the last few years telecom costs have been steadily decreasing

Rent amp Utilities account for 8 of revenues and are increasing between 4-7 per annum

Sales amp Marketing costs account for between 8 of revenues currently

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

General amp Administrative costs account for 10 of revenues currently

With most top tier Domestic BPOs growing between 75-100 per annum over the last few years costs have spiraled With increase in the scale of operations and infusion of professional management team operating expenses will tend to decline

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Depreciation accounts for about 6 of revenues currently With over 50 growth projected by most companies a high degree of capex would need to be maintained keeping it around the same level over the next few years

Tax ndash A full corporate tax rate of 3399 is applicable to the Indian domestic BPO

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Net margin domestic BPO

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Tighter cost control by moving to tier 23 cities leveraging economies of scale and a modest increase in price will boost margins for domestic BPOs steady state net income margins of 12 is expected for most established players by FY12

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

The key difference is Net Margin stems from tax exemption granted Global BPOs in India us 10A of STPI Act This exemption was proposed to be withdrawn in April 2009

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Despite pricing levels in domestic BPO being significantly lower than its internationalcounterpart the EBITDA margins are equally attractive

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

key criteria for vendor selection

Existing client credentials for providing voice and non-voice BPO services

Financial and managerial capability of service provider to sustain and grow in line with increasing demand

Cost and quality efficiency

Existing relationship with service provider

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Buyers will look to outsource non-core process in large volume

Domestic service providers will move into tier 2 3cities to get additional resources at lower cost

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability

Critical success factors of domestic supplier

The speed of setting up and training employees within service provider organizations

With 15 major languages spoken in various parts of India having multi-lingual capabilities becomes necessary to serve the domestic market

Referenceable client base Strong Management Team Scale Capital and Infrastructure capability