Monday, March 24

AOL sells call centre biz to Essar group

Time Warner-promoted AOL (America Online) is selling its 1,200-seater call centre business in India to Aegis Communications, the BPO arm of Essar Group, in an all-cash deal pegged around $100 million. Wipro and other pure-play third party providers were also front-runners for the deal. Aparup Sengupta, MD, & CEO, Aegis, however, said, “This is purely speculative at the moment and we do not comment on speculation.’’ Sources close to the development, however, said that AOL is expected to make a public announcement of the sale as early as this Friday. According to the understanding, AOL will continue to give business to Aegis for the next couple of years. Rajiv Ahuja, vice president (call centre & back-office operations), AOL, will move to Aegis, said sources close to the deal.

When contacted, Ahuja said, “We are not aware of any such move. We have sold some call centre sites in the US as part of business realignment. I don’t know if similar things can happen in India as well, if that works well for us.’’ AOL recently sold a call centre in New Mexico to Convergys. AOL has 2,000 people in India of which about 1,200 people are in the call centre (all of that in Bangalore), around 500 are in the BPO/KPO space while the rest are in software. The call centre offers technical support and customer service for its dial-up/broadband businesses. The BPO/KPO operations support business analytics, market analytics, content production and network operation services.

The $200-million Aegis has over 10,000 people in multiple centres in India and one in the US. The company offers customer relationship management, database management, analytical and market intelligence, customer care, telemarketing, and help-desk services to telecom and financial enterprises. According to sources, Aegis has charted out its growth strategy, which includes both organic and inorganic growth, and this acquisition is in line with it. Be it technology, backoffice or voice, captives in general are under huge pressure to cut cost. A captive faces scale and size limitation, as it works exclusively for a single company, its scope of work is limited and job enrichment opportunity, promotion and career growth for its people are also highly limited.

“Therefore, captives face high attrition and are forced to invest heavily to recruit, retain and train talent,’’ said Pari Natarajan, CEO, Zinnov Research & Consulting. The future is not expected to be bright for captives. “The tax benefit may vanish after a while as the tax authority is already planning to levy additional income/profit tax on captives. As a result, markets will see several small and medium captives being put on the block, waiting for buyers,’’ said Avinash Vashishtha, MD, Tholons, an offshore and M&A advisory firm.

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