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While Mphasis entry in to domestic BPO was like any othersthrough one large dealit has done a good job at ramping up and adding to the client portfolio

The year 2006-07 was the year when most offshore BPO firms with majority of voice work discovered that in terms of both topline growth and bottomline, offshore contact centers were not exactly the best thing to do. They resorted to one or more of the three things: acquired companies onshore, increased non-voice work, and looked at Indias domestic market. MphasiS did all three, especially the last two.

Yes, it started like three others, with a large contract from Bharti Airtel. But among the four that bagged Airtels much publicized deal, MphasiS has ramped up the domestic business most, not just by increasing Bharti business but by bagging other large clients such as Idea and Indias largest bank: SBI. SBI is an account that it can grow for quite some time.

MphasiS domestic thrust is understandable. It got acquired by EDS, which was badly looking at increasing its emerging market presence. In MphasiS, it found just the right piece. The application services market in India is not mature, so it was but natural for Mphasis to start with BPO. Though MphasiS refused to participate in our survey, it is clear that MphasiS India contact center story is more than voice services. As other BPO services open up, EDS will surely like to get a share of the pie. So, while the immediate impact on MphasiS is topline growth, as admitted by its top managers in analyst calls, its long-term strategy will surely include an important non-voice component. HR is one of EDS strength and it is expected that MphasiS will also target that.

MphasiS Rank 4

Jeya Kumar, CEO, MphasiS

In 2006-07, at Rs 80 crore, the domestic market revenue was close to 20% of its total BPO business; this year, it is likely to be higher, thanks to the SPI deal. Its revenue mix will also be a little different with telecoms share coming down.

MphasiS has clearly identified smaller locations to be its choice for delivering domestic services. While headquarter, Bangalore, does remain a location, it has gone to places like Ahmedabad, Noida, Puducherry, and Indore to serve domestic clients. While the Puducherry and Ahmedabad facilities are dedicated to Airtel, the Indore facility is exclusive to Idea Cellular. It supports SBI from Noida and other locations.

One area of interest for EDS could be the emerging public infrastructure management space such as toll management, which will involve a lot of support and back office. MphasiS has still not articulated to its investors whether it will target that space in India or not, but for the time being its Indian thrust is serious and real.

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