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UK? This is hero calling

Indian BPO companies are now busy building a global footprint. It’s now the turn of the New Delhibased Hero group to get into the act. Hero ITES has snapped up Scotland’s largest call centre operator Telecom Service Centres (TSC) in a £40-million deal.

By Rishi Joshi | Print Edition: October 7, 2007

Indian BPO companies are now busy building a global footprint. It’s now the turn of the New Delhibased Hero group to get into the act. Hero ITES has snapped up Scotland’s largest call centre operator Telecom Service Centres (TSC) in a £40-million deal. TSC, the Isle of Bute-based operator with more than 3,000 employees, mainly in Scotland, would be renamed TSC Hero.

TSC officials insist that the move would not lead to any jobs being shifted offshore. Says TSC CEO Kevin Hills: “TSC clients have all made positive decisions to locate their operations in the UK while searching for additional services that complement existing arrangements.”

The Hero Group made a strategic diversification into the IT-enabled services sector a few years ago. It’s now trying to build critical mass for its business and had been on the prowl the last year for an appropriate global partner.

Sunil Kant Munjal
Sunil Kant Munjal
 

The Hero Group’s BPO business offers contact centre, transaction processing and CRM services to clients in the US and Europe. Hero ITES already has more than 1,300 staff working in call centres near New Delhi. The new entity would now start with combined revenues of $100 million.

For the Hero group the acquisition is part of an exercise to build a greater presence in the major markets of Europe, Asia and the US. Says Sunil Kant Munjal, Chairman, Hero Corporate Service: “We are looking not only at a deeper foothold in Europe to augment our contact centre business across the US, Australia as well as the UK, but we are also looking at developing global capabilities in both voice and non-voice businesses across a few specialised verticals.”

The Hero Group though is not the first Indian BPO player to set up base in Europe, particularly the UK. Other major players in the country include Firstsource and HCL. Firstsource has two centres in the UK. One in Belfast and another in Londonderry and employs close to 1,000 people in these centres. HCL has two centres in Armagh and Belfast, which employ over 2,000 employees.

Explains a Firstsource spokesperson: “To be a credible global provider of BPO services, companies will need to develop global delivery capability offering clients with onshore, offshore and nearshore delivery capability. Since we have clients in the UK, our moving to the UK is to offer our clients the onshore option.”

Besides, there are other benefits of building a base in countries like the UK. Rather than set up a number of small centers in various European countries to support different European languages, Indian outsourcing companies can set up a single center in UK destinations like Scotland, where staff can offer services in up to 25 languages.

The UK’s key advantage is that there are a large number of foreign students who come to study in universities, and stay on to work there which gives BPO companies an opportunity to hire people for their language skills. Then for Indian BPO companies struggling to cope with high attrition rates, in UK there is as yet very little competitive attrition.

Clearly then, given the inherent advantages, going forward there could be a growing number of BPO companies looking for acquisitions abroad.

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