Voice support – India losing its glitter

The Philippines was once a colony of the United States from the year 1898 to the Second World War. This was more than enough for the Americans to instill their culture and language in the Philippines. Now India is losing its share in the BPO sector to Philippine, due to their cultural and language affinity to the US. It is said that American customers are best handled by Philippines because they know the American culture better.

Two years back when Barclaycard decided to outsource their voice based customer service of credit cards and lending business, the Chief Operating Officer Marge Connelly has specifically stated that it should be outsourced to the Philippines. Many of the of the Indian BPO service provider turned up to bag the deal, but it was given to an India BPO firm with delivery center in Philippines. This is just one instance and this trend is now increasingly observed in many of the organizations in the US.

Statistics show that the voice based contracts off shored to India has declined by about 50 per cent over the last six years. This has affected the BPO industry as a whole. In a report prepared by NASSCOM and Everest in 2008, it was observed that the BPO industry in India will generate revenue of USD 30 billion from exports in 2012. It also said that the revenue from exports can even go up to USD 50 million. But the recent report by NASSCOM says that the industry will generate just about USD 16 billion, with a growth rate of 12 per cent. The CAGR since 2006 is just 13.41 per cent.

The loss for the Indian BPO industry is a gain for the Philippines BPO industry. The Philippine industry grew at a robust 21 per cent last year and generated USD 10.9 billion. In the case of pure voice support services, the revenue of the industry in Philippines was USD 5.2 billion, while that of Indian industry was USD 4.8 billion. This clearly indicates the leadership position enjoyed by the Philippines BPO industry.

The figures indicate that a large chunk of BPO business that was once the share of the Indian industry is now going to the Philippines. It is estimated that about 75,000 seats that could have been added to India was diverted to Philippines. Another estimate says that the Indian BPO industry will lose another USD 25 to 30 billion in revenue to the Philippines in the next decade. The contracts will be bagged by Indian companies in Philippines, but the Indian industry will lose its share. Experts in the industry say that BPO companies in India are not going to demonstrate a two digit growth in 2012-2013.  

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