BPO companies seem to have found a significant change in fortunes with the latest decision from TRAI (Telecom regulatory Authority of India). Telecom companies which operate from long distances such as Cable & Wireless, Sify, AT&T, BT etc. have been requesting the reduction in cable landing fees for a long time.
TRAI has decided to concede to their demands and reduce the fee for cable landing by 50% to be effective from the first of January. The reduction in cable landing fees will reduce the bandwidth charges by half, thereby ensuring an enormous reduction in costs for BPOs. This will enable them to boost their add-on-services.
This is an effort to bring the charges for cable landing in India similar to that of the global one. In general, BPOs have been facing a decline in profits due to the continuing economic pressure coupled with the delay in deal closures with clients. To circumvent this situation, BPO companies have been trying out a number of options to widen their scope.
The companies have expanded to offer more services rather than the traditional voice services. Client servicing, managed and consulting services and in some cases, helping with core functions are also done by BPMs.
Benefits of reduction in bandwidth charges
TRAI’s initiative to cut the cable landing fees by 50 percent is hugely welcomed by BPOs. The reduction in the bandwidth charges will help the companies provide a wider range of offerings.
- The reduction in cost will help in boosting several add-on services useful in BPO ecosystem.
- When the bandwidth charges are reduced, BPOs can offer high-end services. These services include answering queries via internet rather than call center through images and videos.
- The cost reduction can benefit B2B clients because BPOs will be able to provide cheaper services. This will alsoraise competitiveness among BPOs.
- There is the possibility of passing on the savings to consumers or clients as well, owing to the industry being a very competitive one.
- The savings can also be used by the companies to increase profitability through reduction in operating costs.
According to Keshav Murugesh who is group CEO at WNS, it is still too early to determine the benefits of such a cost-cut that will be passed on to the users by the service providers. He cautions everyone to wait until the tariff and specific details regarding the order are out.
The next task on the agenda is the decrease in the bandwidth charges for domestic internet connections provided by local service providers. This will provide immense thrust to the penetration of internet in the country.