Domestic contact centers: Under the spotlight

DQW Bureau
New Update


Buoyed by unrealistic projections by the Nasscom-McKinsey Report, which foresaw $17 billion revenue from the IT-enabled services sector in India, by 2008, many set up their international contact center shops, blinded by the lure of dollar. Some of them who started their centers, amidst many fanfares, are on the verge of closure. As they do not have any business.

Hundreds of seats are lying vacant, infrastructure is unused, trained manpower is without any work. Companies even resorted to mass layoffs. With the entry of the world's top contact centers like Convergys, the business plans of some of the Indian operators are bound to get a beating. It is in this backdrop that domestic call center companies grabbed the opportunity to set up domestic centers, to offer services to the consumers in India.

As customers in India become more demanding than ever before, companies vie among themselves to reach out to them, resulting in immense opportunities for the domestic contact center operators. The Indian customers have tasted blood, thanks to their exposure to the real world of customer care. The expectations of the Indian consumers have risen considerably. Days of 9 to 5 customer cares are numbered, as customer expectations are rising day-by-day and is heading towards a 7/24/365 scenario.


How big is the market

The market is huge, given an increasing focus, the companies are paying to reach out to customers and retain them. According to Sam Chopra of Cybiz "Today, domestic contact centers serving captive clients account for about 5,000 seats, and the third party centers which are still in their infancy, account for about 1,000 seats. This is just the tip of the iceberg". Shyam Sunder of Magus, one of the oldest players in the field says, "The domestic contact center is still in its infancy. There is a need to educate most users of this service". That gives an idea of the scope that is there. There are not many prominent players in the field. Delhi-based Orion Dialog, which started its operation in 1993 has now a national presence with seven centers.

Captive centers will soon be passe?


More and more companies intend to concentrate on their core competencies and outsource their job of handling customers to the outside centers. Companies like Microsoft, Bose, Satyam Infoway, Living Media, AirTel, and a host of others, have gone in for outsourcing their customer-support services. If the domestic players are to seize the opportunities, they ought to convince the banking and financial institutions in particular, about the safety and security of their valuable customer database.

Indian banks like ICICI have gone in for the captive ones, on the lines of the multinational banks like Citibank. According to Srikant Shastri, managing director of the Delhi-based Solutions, an upcoming player in the domestic segment, "Sensitivity of the data inhibits several companies from outsourcing their customer-care activities. Mostly. Tele-marketing jobs are outsourced, as the database is not so crucial, and no value-added services are provided".

Is it lucrative?

DoT guidelines for Domestic Contact Centers

  • DCCs are allowed to have inbound PSTN traffic with outbound banned
  • The DCC can be established on a separate infrastructure. However, the request for operating contact center on the existing private networks, will be evaluated by DoT and may be permitted if found in-line with the present regulations.
  • Interconnectivity of the two domestic contact centers of the same organizations, is permissible subject to the permission by

  • Interconnectivity of international with domestic contact center is not permitted.

The party shall declare the indicator numbers of DEL, terminated on leased line for contact centers.


The billing per seat in domestic as compared to the international contact center, is not so attractive. But still, the margins are good enough to sustain on the basis of generating volume and by offering a range of value-added services. Investment per seat costs about Rs 50,000 initially, with just a PC and a phone to answer simple queries. This can be upgraded to IVR, etc, and the cost increases, depending upon the requirement of the client, which costs about Rs 4-6 lakh. Billing on an average is 10,000 per agent per month, for one shift for basic services, to 30,000 to 35,000 per seat in the center, which provides technical and value-added services. Needless to say, it will be the volume, which will drive the business. According to Sam Chopra of Cybiz "Industry analysts generally focus on the international contact center industry, without realizing that there could be an equal opportunity in the domestic market, in terms of employment if not revenue. There are vast differences in the domestic contact center industry, which has equal scope for growth".

Human resource is the key as is marketing


In an industry, which has one of the highest churn rate at present, retention is a challenge which companies are trying to cope up with. According to Tina Sapra of Orion, "Our people make the difference. It is with this philosophy that we have built our HR systems and the organization culture". She further adds, "We have put in place robust HR systems like new joiner orientation, continuous training, quarterly performance evaluation, work rotation, performance-based incentives, etc". As regards to training, Ishita says, "Understanding the importance of training, we have made it an ongoing process. There is a constant focus on developing the employees and help them grow in terms of newer skills, attitudes and knowledge". The domestic players have an advantage to learn from the mistakes of their international counterparts, who have not been successful in this marketing efforts, which is the key.

Threat from the international players

What would happen if the international contact centers are allowed to operate domestic centers and also if inter-connectivity is allowed? Most of the domestic players are of the view that international players would not venture into domestic contact centers, in all probability, but the threat will always be there. According to Vikram Talwar, CEO, Exl Services, "We have no intention to get into domestic business even if it is opened for us, as it does not makes sense for us, given the infrastructure costs are very high." Shyam Sunder of Magus, agrees that there is a threat but he feels that this ability will be restricted to a stronger and much more focused Indian companies.


Advantage for paging companies

Paging companies have taken the lead in utilizing their paging infrastructure and human resources for answering queries for other companies. With the number of paging subscribers decreasing everyday, this has become a new opportunity for these operators.

According to Sam Chopra, president Cybiz, "Right now, they have manpower strength to run contact centers, some idea of customer care and possess the infrastructure in terms of networking. Whether the present moribund paging industry can seize the opportunity or not, is yet to be seen".


Who needs the service?

Service segments that require such services are telecom service providers, banking and financial intuitions, airlines and hospitals, manufacturing, FMCG, and media and entertainment, to name a few important segments. To have an idea about the size, let us take an example of telecom service providers. Inquiry services have been a part of the incumbent operators long before the concept of contact center became more fashionable. BSNL and MTNL are beginning to realize the importance of setting up such centers and are persisting with setting up their own captive centers rather than outsourcing. The reason is not far to seek. These companies have a sufficient surplus staff, to be utilized to man those centers. According to BR Khurana, director, commercial and new services, BSNL, "We will set up our own centers wherever we have surplus staff but outsource at places where we do not have sufficient manpower". Given that number of subscribers in basic and cellular only total to about 36 million, the opportunities are immense for the operators to outsource, and contact center operators to provide the required services.

The hurdles

The policy clause of not allowing outbound calls is a great stumbling block for companies. The toll-free number is beginning to find its way into the Indian marketplace, but being cost prohibitive, has been a big deterrent. One can hope that once the private domestic long distance projects are in place and the STD tariff falls, concept of toll-free is going to play an important role in an overall nature of the Indian customer support. Also, the decision of not to allow for interconnection of domestic with international centers, has been a hurdle towards having a centralized operation. Most of the restrictions are likely to go with the new Convergence Bill coming into effect, according to the DoT officials.

Sudesh Prasad