Asia Netcom to tap into India's outsourcing boom

NEW DELHI: Hong Kong's Asia Netcom has tied up with Indian Internet services firm Sify Ltd to provide high-speed private network services to global firms planning to set up back office units in India, it said on Thursday.

William Barney, president at Asia Netcom, a unit of China's No 2 fixed-line carrier China Netcom Corp, told Reuters the new agreement aimed to exploit an outsourcing boom in India and would help triple the company's revenue from the country by 2008.

Asia Netcom designs high-speed networks, also known as Internet Protocol-Virtual Private Networks (IP-VPN), for multinational firms, like banks, to connect securely their local and international offices.

"Every U.S. company and every European bank is looking at India to outsource its back office functions, whether it be customer service or financial clearing," Barney said at the sidelines of a launch news conference.

He expected Asia Netcom's revenue from India to ride the robust growth in the country's back office sector that taps a large pool of computer-literate and relatively cheap graduates to offer low-end services like claims processing and call centres.

India's revenue from such services surged 59 percent to $2.3 billion in the past year to March and are likely to jump 54 percent this year.

"The Indian market is absolutely critical for us. When we look at our five year plan, 15-20 percent of our global revenue will be coming from India from about five percent now," Barney said.

Set up in March 2003, Asia Netcom expects to post sales of around $200 million this year, which are forecast to grow at least 15 percent annually over the next few years, Barney said.

Asia Netcom would also target local companies through its tie-up with the Nasdaq-listed Sify which provides similar services to more than 900 Indian firms, he added.

Apart from China Netcom, Newbridge Capital Inc and Softbank Asia Infrastructure Fund also owns stakes in the firm.

© Reuters