Outsourcers alerted to India call centre crackdown

Recent moves by Indian regulators to clamp down on unregulated call centres and business process outsourcers (BPOs) could have serious implications for global firms that outsource services to providers on the sub continent, experts warned today.

Gartner urged enterprises to immediately check whether their providers are affected by the directive from India's Department of Telecommunications (DoT) ordering ISPs to stop providing connectivity to service providers not registered with the government.

The analyst firm estimates that this order could close nearly 2,000 call centres in India, costing 50,000 people their jobs.

The DoT issued the order because some unregistered call centres were using ISPs' infrastructures to make illegal telephone calls.

Organisations using India-based call centres should immediately verify that their service providers are registered. If they are not registered, these firms should explore options to keep call centres running in case of a government shutdown.

"The DoT's heavy-handed order forces its own agenda at the expense of the larger interest in employment and international commerce. With increasing global competition, India cannot afford to be seen as unfriendly to business," a Gartner advisory by analysts Matthew Goldman, Drew Kraus and T J Singh warned.

"Foreign businesses may view such reactive policy decisions as a threat that increases their risk of doing business in India. This may force these businesses to re-evaluate their global sourcing strategies.

"If the call centres of large international organisations are suddenly inoperable, the organisations are likely to blame the DoT.

"They will also be much more likely to change their BPO strategies by looking for friendlier markets, or bringing services back onshore, than simply switching to other Indian providers.”

The report added that the DoT order is typical of "booming, adolescent IT service markets".

While it expected that the move would have little effect on large, established providers, Gartner cautioned that many large providers may subcontract some call centre work to unregistered providers, so disruption is possible even if the main provider is registered.

While this dispute plays out, it may give pause to organisations in the middle of considering offshore call centres, Gartner commented.

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