BPOs take tier-II call for new operations
NEW DELHI: Faced with rising real estate costs, crumbling infrastructure and intense competition for skilled labour in major centres, BPO firms are looking at smaller cities as sites for new operations. This phenomenon has the potential to substantially reconfigure India’s economic landscape. Let us discuss this as below.
In part, this trend is the price of success, as the BPO industry is growing strongly to $8.4 billion worth exports in FY 2006-07, up 35% from the previous year. Growing price competition from countries in Southeast Asia and Latin America, appreciating Rupee value and dominance of big software sector over infrastructure – land and labour, have forced BPO firms to look at alternatives. By this process, so-called tier I cities of Bangalore, Mumbai, Delhi, Hyderabad, and Chennai are beginning to lose investment to new locations.