BANGALORE, INDIA: Indian IT major Infosys has expanded its domestic business operations with the launch of a domestic BPO operation unit, under the Infosys BPO arm, recently. The company had launched an independent India business unit last year.

“Our foray into the India market is very recent as we were largely concentrating outside, but we are seeing the Indian market maturing as the West,” said S. Vaitheeswaran, head, MFG manufacturing unit in Infosys BPO, while speaking to CyberMedia News.

He added that the current market in India is predominantly based on the customer service model, which would evolve to an end-to-end solution offering model as it matures.

The company from this unit would offer end-to-end solutions, value-added transactions, and best practices platform through their shared service center. It is not targeting at getting into the traditional call center or customer-service based offerings because of its highly cost-driven and commercialized nature.

The new BPO unit would target verticals like manufacturing, telecom, government etc. “We are sitting on a huge bed of opportunities coming from sectors like manufacturing and telecom.” said Vaitheeswaran.

“The largest client for us in this business is going to be government. If you see, the size of opportunity in this sector itself runs around billion dollars. That itself is the reflection of the multiple revenue opportunity that we are going to get.”

Keeping in mind the cost factor as well as need of localization, the company is in talks for tie-ups with a few rural BPOs in parts of Karnataka and Maharashtra. The rural tie-ups are basically planned for high volume transaction and not for the high-end work. It would be more of client specific, where they would be able to address them with the local native language.

On the hiring side, Infosys is looking at the tier 2 and the tier 3 cities because of the low-cost talent available. “With the market being smaller, the attrition may not be higher. Good amount of talent mining is possible from the tier-2 and tier-3 cities,” added Vaitheeswaran.

It currently has hired around 200 to 300 employees under this unit, which also include the campus recruits. In the next one year the unit is planning to add around 500 more to its headcount.

Talking about how the company is seeing the competition in the overall BPO industry with new emerging markets in other locations, Vaitheeswaran said, “Clearly the market is quiet competitive. But India would still remain a competitive advantage for longer time even if there are other emerging low-cost locations such as Philippines, China or Egypt.”

He further said that India's advantage as an outsourcing destination not only remains in low cost, but also because of multiple value additions such as the highly available talent-pool, geographical spread as well as the type of offerings with better business-metric understanding.

Meanwhile, Infosys chief executive said the company is expecting a revenue to rise 10 to 15 per cent in the current fiscal year to March, but pricing remains a concern.

"Clients are under pressure anyway so they are putting pressure across the board," Amitabh Chaudhry, chief executive of Infosys BPO Ltd, told Reuters in an interview.

Revenue at the wholly owned unit of India's second-largest software services company grew by 26.4 percent to $316.2 million in 2008/09.

Chaudhry said the outsourcing business would remain uncertain for the next 12 to 18 months, as large Western clients curb non-essential technology spending in a sluggish economic environment.