Opportunities
IDC predicts that the Asia/Pacific call center services market will grow from US$1.2 billion in 2000 to exceed US$4 billion in 2005. Due to the rapid expansion of the Indian market and the expected boom in the Chinese market, India, Australia and China look set to dominate the market by 2005 (25% CAGR)

Call Center Economy

Economically feasible size and ideal location of call centers

Most Indian companies begin with 100-seat call centers.

A call center may be economically feasible at anywhere between 10 seats to over 250 seats in size, depending on expected traffic and customer service objectives of the company concerned. The industry rule-of-thumb is that call centers over 300 seats are challenging to manage. Smaller call centers are more economical in areas where there are many call centers and labor availability is tight, since their Human resource requirement is lower.

Indeed, availability and cost of Human resource is the greatest deferential, rather than cheap real estate, when choosing a location for a call center. Call centers need to be located within commuting distance in areas with large pools of educated people. If multilingual call centers are planned, they must be located in areas where people with appropriate skill sets are available. Some call centers prefer to be located near colleges, to facilitate employment of college students on a part-time basis.

In India, Gurgaon, virtually a suburb of Delhi, is the hot favorite for call centers - some call it the call center capital of India. Chennai (Madras), Mumbai (Bombay), and Ahmedbad are the other places where call centers are coming up. These are the preferred locations for voice call centers. For e-mail/web-based help desks, Bangalore and Pune are considered good choices.

A report by Colliers Jardine cites two major considerations for locating call centers in India - staff skills and costs. Other considerations are the availability of space, stability of the State government, the regulatory environment within each State, employee transport needs and quality of telecom infrastructure.

According to the report, Mumbai and Delhi have the largest pools of the required human resource. While Mumbai has an edge over Delhi in work attitudes, it loses out to the Capital on manpower costs. Hyderabad and Chennai have cost-effective manpower bases with the required language and other skills.

Suburban business districts such as Bandra-Kurla and Andheri-Kurla in Mumbai, Gurgaon near Delhi and Guindy in Chennai have become the hubs of call center and other shared center activity in the respective States. These SBDs offer rates that are comparatively lower than in the central business districts, and also provide ample vehicle parking space. But the downside in some cases is the need for employee transport.

In the area of regulatory environment and governance, Mumbai scored higher than Delhi in administrative support and flexibility. Mumbai’s focus on mega projects includes capital incentives and duty exemptions.

Chennai has a business-savvy State administration, leading to a high share of foreign direct investment. The local administration in Hyderabad, with its investor-friendly outlook and focus on service industry, has overcome its disadvantages in physical infrastructure.

In terms of the quality of infrastructure available, Mumbai is the leader in power, telecom and office infrastructure. Delhi’s infrastructure having deteriorated over the last few years, companies prefer to relocate to Gurgaon, which shares Delhi’s advantages but has a better infrastructure backbone.

Hyderabad, with 14 Internet service providers, and Chennai with six, are clearly leveraging information technology to overcome shortcomings in infrastructure. The power situation in both States, according to the Colliers Jardine survey, needs to be improved substantially.