29

TH
30
TH
JANUARY 2005 - KARACHI SHERATON


Presents
Supported by
THIS CONFERENCE BRINGS AN
INVESTMENT OPPORTUNITY
FOR PAKISTAN
FOR THE ESTABLISHMENT OF
A $ 50 BILLION INDUSTRY
WITH 30% PER ANNUM
GROWTH RATE LINKED WITH
$ 700 BILLION E-COMMERCE
TRADE WORLD-WIDE!

INDIA
IS THE WORLD LEADER TODAY
IN THE CALL CENTERS

PAKISTAN
HAS A CHANCE OF REPLACING
INDIA AS THE WORLD LEADER
IN THIS INDUSTRY

WHY IS INDIA
THE WORLD LEADER IN CALL
CENTERS ?
Lower input costs, reasonably good
infrastructure, a trained English-speaking
workforce and a favorable time zone differential
vis--vis the US have spurred the growth of the
call center industry in India.

India has emerged as a major location for IT-
enabled services such as call centers, customer
support centers.
WHAT DID INDIA GET FROM
THESE SERVICES ?

A revenue of US$ 2.3 billion, year ending
March 31, 2003, up almost 60 percent
from the previous twelve months
A prospect of Indian exports in this area
exceeding $15 billion annually before the
end of the decade.

WHAT IS INDIAS POSITION TODAY ?
Today, there are almost 400 call centers
operating in India (including "captive"
operations, e.g. GE Capital) employing
170,000 people in all of these centers.

Research indicates that over the next few
years, about a dozen Indian call centers
will have revenues in excess of $100
million.



PROMINENT PLAYERS IN THE
CALL CENTER AND BPO
MARKET IN INDIA (2002)

Sales (million USD) People

Wipro Spectramind 41 5000
Daksh eServices 35 4,000
WNS 35 2,500
Exl Service.com 28 2,300
OfficeTiger 25 1,000


PROMINENT PLAYERS
(CONTINUED)
Sales (million USD) People
HCL Technologies BPO.. N/A 1,646
ICICI OneSource N/A 2,175
Hinduja TMT 24 1,400
MsourcE 20 3,162
Tracmail 11 1,000
Progeon 4.4 685

WHY HAS BEEN INDIA
ATTRACTIVE ?
Entry barriers to set up a call center in India are low.
Typically, the average investment levels for a 100-
seat call center vary between Rs 40-60 million ($0.8-
1.2 million).
Salary levels are at around $280-300 per month per
person.
Currently the operational cost per seat per hour in
India is approximately $10.
Estimates vary depending on location, skills, service
levels, etc. As a rule of thumb it costs 40-60 percent
less to operate a call center in India than in the US.

WHAT CAN PAKISTAN OFFER
OVER INDIA IN THIS
INDUSTRY?
There are many constraints for growth of
Indian Call Centers that include:
In the case of voice-based call centers, the
Indian accent is considerably different from an
American accent;

Infrastructure problems: Transportation for
employees, power reliability, phone reliability,
etc;
CONSTRAINTS FOR GROWTH OF
INDIAN CALL CENTERS

High attrition of employees -- 35-40
percent annual employee turnover is
typical;
Regulatory action against Indian vendors
in reaction to job losses in the US. Several
U.S. state legislatures are considering bills
that would require state contractors to use
U.S.-based employees;
-CONT-
There is also a proposal to replace state-
to-state customs duties (octroi) with a
national value added tax. Both those tax
proposals could be combined into a single
scheme.

For India that is a blow on foot, for
Pakistan that is a golden opportunity ;
OPPORTUNITY FOR PAKISTAN !
To take advantage of this scenario, Govt of India
is all set to impose a income tax of 36% on all
call centers owned by foreign companies;

Plus, a proposal is under consideration in new
Delhi to tax activities conducted over
international private leased connections (IPLC)
that carry most of India's voice and data traffic to
and from the outside world.
SOME FOREIGN OWNED OPERATIONS
Examples of Captive Operations in India

GE Capital............... Customer service
American Express......... Customer service
Standard Chartered....... Back office admin
EarthLink................ Customer service
AOL Time Warner.......... Customer service
Citibank................. Back office admin
HSBC..................... Back office admin
AXA...................... Insurance claims adjudication
Willis................... Insurance claims adjudication
American Annuity Group... Insurance claims adjudication
Lufthansa................ Accounting, frequent flier programs
World Bank............... Payroll processing
McKinsey................. Research
PAKISTAN OFFERS FOLLOWING
ADVANTAGES OVER INDIA:

1. Western experience:
Executives at IT firms in Pakistan often have worked and gone to school in the
U.S, which is Pakistan's largest export market.
Indian IT firms whose managers have worked in the West are generally more
expensive than similarly positioned Indian firms,
without always providing noticeable differences in program implementation
capabilities.
The willingness of Pakistanis to return home from the West stands in marked
contrast to most Indians who arrive for school or work in the West and never
look back.

2. Higher labor availability:
Fewer holidays in Pakistan means less slippage in staff availability compared to
India.
IT firms in India are advised to hire a diverse workforce so that members of one
community can enjoy important festivals while members of other communities
cover the phones and keep production going.

-CONT-
3. Good accents:
Pakistan's official language is English.
Only Kolkata (formerly Calcutta) and the Punjabi areas of India can come
close to competing with accents in Pakistan,
Language skills and accents provide Pakistan with a major advantage
over all other Asian outsourcing destinations.
4. Low cost talent pool:
India's top-tier labor force for IT work has been stretched thin, especially
Bangalore, escalating wage rates, turnover and higher outsourcing prices
are reaching critical mass.
The urban infrastructure has exceeded its carrying capacity.
Annual turnover rates reported to International Staff.net for most
merchant call center facilities in India are approaching 100%.
High turnover rates are causing a shift to second tier Indian cities and to
Kolkata.
Escalating turnover rates are one of the Indian outsourcing industry's
dirty secrets.
Whereas Pakistan's top-tier talent pool is largely untapped and turnover
rates are less than 20 percent.

WHAT PAKISTAN OFFERS
SWOT
Strengths
OK communication infrastructure with wide Internet connectivity getting
cheaper and more reliable
Highly educated, English speaking work force engineers, computer
experts, doctors, lawyers, MBAs, accountants
Returning professionals with foreign education/training
Local graduates of increasing number of high caliber institutions
Professionals trained at local operations of MNCs
Extensive Diaspora in N. America, UK, Europe and ME
Adoption of international standards CMM & ISO 900x
Supportive and increasingly relaxing government policies
Low cost of operations
Weaknesses
Image and perception
Missing service culture and customer orientation
Numbers not as large as Indias
PTCLs mindset and negative attitude towards any change in policies
PAKISTANS LABOR ARBITRAGE
POTENTIAL
Profession No. of students Monthly salary Monthly salary Pakistan's cost
presently enrolled in Pakistan (US$) in US (US$) as a % of US cost
Accountancy 16,000 350 3,550 9.9
Business studies 8,000 435 4,613 9.4
Computer/IT 5,000 250 4,341 5.8
Law 2,500 250 6,250 4.0
Medical 5,500 200 7,500 2.7
Engineering 20,000 200 5,139 3.9
Agriculture studies 12,000 175 3,170 5.5
Polytechnic / vocational 64,000 70 3,250 2.2
Liberal arts, general science 485,000 85 2,000 4.3
Sources: (1) National Education Policy document, Ministry of Education, Government of Pakistan
(2) Business Week
(3) Industry sources
(4) TMT Ventures estimates
Pakistan is producing over 600,000 graduates every year in various disciplines vs
2m in India; of these 30-50% are of the required quality
PAKISTANS LABOR ARBITRAGE
POTENTIAL US SALARY RATES
Source: Business Week
Profession Monthly salary Profession Monthly salary
in US$ in US$
Software engineer 5,013 Credit Analyst 3,391
Architect 4,698 Biologist 3,322
Clinical research associate 4,667 Technician 3,250
Programmer 4,540 Plumber 3,119
Internal Auditor 4,029 Computer operator 2,833
Tax Accountant 3,817 Admn assistant 2,758
Tech sales support specialist 3,750 Welder 2,677
Web designer 3,742 Accounting clerk 2,500
Geologist 3,667 Data entry clerk 2,200
PC maintenance technician 3,566 General clerk 2,168
Tool & Die maker 3,492 Call Cener rep. 2,085
Salaries in Pakistan are 5-10% of US salaries; in some trades as low as 2%
PAKISTANS LABOR ARBITRAGE
POTENTIAL CALL CENTER COST
COMPARISON
Source: Nasscom Strategic Review 2003, Merill Lynch,
TMT Ventures estimates
US$ cost per FTE US India Pakistan Pakistan as % Pakistan as %
(Full Time Employee) of US costs of Indian costs
Personnel 42,927 6,179 3,756 8.7 60.8
G&A expense 8,571 1,000 984 11.5 98.4
Telecom 1,500 2,328 2,636 175.7 113.2
Property rentals 2,600 847 346 13.3 40.9
Depreciation 3,000 1,500 197 6.6 13.1
Total expenses 58,598 11,854 7,918 13.5 66.8
The wage cost in India is just about one-fifth or one-sixth of US
levels. Salaries represent only 50% of the total costs. When you add
the other costs (real estate, telecommunication, utilities, etc) Indian
operations would cost about a third of what they would in the US.
Alok Aggarwal, Co-founder & Chairman of Evalueserve, a large
Indian BPO company
WHAT ARE WE DOING ?
IN ORDER TO ADDRESS, THIS OPPORTUNITY, WE ARE HOLDING THE
FIRSTEVER INVESTMENT CONFERENCE ON CALL CENTERS;

THIS CONFERENCE IS IN KARACHI ON 29
TH
-30
TH
JANUARY 2005;

LEADING SPEAKERS AND BUSINESS HOUSES FROM USA, UK,
AUSTRALIA, MALAYSIA, SWEDEN, SOUTH AFRICA, HONG KONG,
SINGAPORE & INDIA ARE COMING TO SPEAK AND SHARE THEIR
EXPERIENCES;

CALL CENTER BUSINESS WILL BE OFFERED AND PLEDGED BY
INTERNATIONAL COMPANIES TO PAKISTANI INVESTMENT COMMUNITY;

JOINT VENTURES WILL BE OFFERED BY INDIAN CALL CENTERS ALREADY
OVERLOADED WITH PROJECTS;

GOVT OF PAKISTAN HAS ENDORSED THIS CONFERENCE;

MINISTRY OF IT & TELECOM, PAKISTAN SOFTWARE EXPORT BOARD
(PSEB), BOARD OF INVESTMENT AND PASHA ARE THE PARTNERS;
SOME OF THE COMPANIES ATTENDING
AS SPEAKERS?
Nortel Networks: A internationally renowned company on Call Center
& Telecom solutions-UK.
AOL Time Warner Operates a major call centers in INDIA
3D Networks: Call Center Integration & solution providers-Singapore
Teleopti: Work force Management system ( used worldwide)-
Sweden
WNS: Operators of 3000 seats at their call centers in India
(British Airways, and 10 other airlines) are operated
through these call centers which are located at Pune,
Mumbai, Nastiq as well as in Colombo, Srilanka.
Concerto: Customer Relation Management Systems (CRM)- USA
DELL: Computer terminals and network servers-USA
AstraNetcom: A major call center operator from Dehli, INDIA
Khoday Systems: A Major Call Center, INDIA
SEIBEL: World renowned company in CRM solutions-USA
Davox: Predictive Dialers USA
NovaTel: Call Center Integrator, USA
Global Connect: Business Out sourcing company USA
CinCom: Call Center Business outsourcing company from
Cincinnati-USA
PCW: Formerly known as HONG KONG Telecom
SOME OF THE SPEAKERS
Carl Bildt: Chairman, Teleopti & Former Prime Minister of
Sweden
Chris Luxford: Chairman, 3D Networks, Australia.
Mark Stevens: Asian Head, Nortel Networks, Singapore
S. K. Jha: Country Manger 3DNetworks,India.
Atul Pai: CTO, Khoday Systems, India
Rakesh Gupta: Chairman, Astra Netcom, India
Romi Malhutra: Managing Director, DELL India
David Tibble: Head of WNS call center for British Airways and 10
major airlines of USA, India
David Smith: CEO Global Connect USA.
Asish Paul: CEO, CinCom, USA
Imran Aftab: Global Outsourcing, AOL Time Warner, USA
Michael Parker: COO, NovaTel, USA
info@callcenter.net.pk