Spanco planning acquisitions next year

Spanco Telesystems is targeting the $2 billion domestic BPO market in India. The company aims to tap a major piece of the domestic BPO pie, by bringing in international experience in the domestic call centers.

Founded in 1995, Spanco is a networking and system integration solutions company listed on the Bombay Stock Exchange.

Sandeep Soni, CEO, Spanco BPO in an interaction with Bhaskar Hazarika of CyberMedia News revealed the company's expansion plans and the target to touch $170 million revenues by this fiscal.

What are your plans for the Indian market? What is the investment you have outlined for India?

We are setting up two offices in India: Gurgaon and Mumbai. Gurgaon went operational last week. It has a capacity of 1,000 seats. Mumbai office will go live next month with 1500 employees. We are targeting the unorganized domestic BPO market in India. We are bringing the rich international BPO experience for the domestic market. We have already invested Rs 100 crore for setting up both these offices. We plan to invest Rs 300 crore in two years. In the next two years we are ramping up our headcount to 25,000.

How do you foresee growth and opportunity in the Indian domestic BPO market? There are a number of small domestic BPOs operating with low investment and fat profits. How are you going to sustain in this market?

There are huge opportunities in this space, as the market is not yet organized. There are a large number of small players in the domestic BPO space. It is the right time to enter this market offering the international quality. According to NASSCOM the domestic BPO market is estimated to be around $2 billion. Currently there are a lot of investments in the BFSI, hospitality and the telecom sector and we see huge opportunities in it. We will be primarily targeting these sectors. We are also targeting the debt recovery vertical. We are targeting to set up our presence in 5 to 10 cities.

What do you mean by debt recovery agency? Is it going to be like the loan recovery agents, which are in the news for being involved in illegal ways of loan recovery?

With the number of international financial institutions setting up their offices in India, debt recovery or collection is a major business in India. There have been numerous cases of harassment by loan recovery agents recently. This is due to the poor training and lack of skills for operating in this business. We are coming up with a trained set of employees to deal with these kinds of situations. We will be offering this banking solution, closely associated with the guidelines issued by the Reserve Bank of India. We will be training these employees about the customer behavior and communication skills. We will bring in our expertise of the US market on debt recovery, which is currently lacking in the Indian market.

Would you be looking at merger and acquisitions to expand your business?

We are in talks with a number of companies for M&A. We have zeroed in on two companies for acquisition, which are already operating in the domestic BPO space. We are planning to acquire one company in the next four months time. We will be announcing the next acquisition by the mid of next year.

Can you share something on you international operations?

In terms of our international operations, we are planning to set up operations in Singapore in February 2008. We have also partnered with a BPO company in Doha and set up operations there.

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