Capital Punishment

A key issue facing many of India’s BPO companies is lack of capital. In a capital-intensive business, BPO companies have to invest in office space (and $7,000-8,000 a seat), technology, redundancy, and communications. Indian companies are finding that customers are more likely to give business to BPO companies that have already invested in people and infrastructure.

The access to labor and quick and cheap connectivity are key deciding factors in placing a contact center, often viewed by BPO execs as the difference between success and failure. Office space leaders are currently based in Delhi and Bangalore with secondary hubs being Mumbai, Hyderabad , Chennai and Pune, offering relatively low cost locations.

Jones Lang Lasalle has said that in the first six months of 2003, office space taken up by contact centers accounted for 82% of the total absorption of office space in Delhi , 51% in Mumbai and 80% in Bangalore.

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