Indias Tech Mahindra Ltd. expects to start offering call center services to Bharti Airtel Ltd.s operations in six African countries from Feb. 1.Earlier this year, Bharti Airtel had selected Tech Mahindra–along with International Business Machines Corp. and Spanco Ltd.–to provide business process outsourcing (BPO), services to the carriers operations in 16 African countries.According to Sujit Bakshi, President, Corporate Affairs and BPO, under the five-year deal, Tech Mahindra will offer core customer service functions such as call centers and back offices in Zambia, Gabon, Ghana, Malawi, Congo DRC, Congo B. The deal didnt involve making any upfront payment to account for cost savings that may accrue to Bharti.
Tech Mahindras BPO division accounted for 5.8 percent of the companys USD 990.06 million total revenue in the last fiscal year ended March 31. The segment employed 8,489 people at the end of the September quarter.
Bharti entered the African market through a USD9 billion acquisition of Kuwait-based Mobile Telecommunications Co.s assets in the continent in a bid to expand its business to offset the effects of stiff competition in India. The company has about 45 million subscribers in Africa, where the average telecom penetration is lower than India, and aims to achieve 100 million subscribers by 2012.
According to Bakshi, as part of the deal, Tech Mahindra will take over about 2,000 employees on the rolls of Zain and on contract and hire more staff locally to offer services in the six countries. Zain has about 4,500 employees in the 16 African countries, including sales personnel. Tech Mahindra is also targeting additional revenue streams from the telecom operator as it adds new subscribers and from new lines of services that Zain will offer.
As per the contract, which runs in two phases, Tech Mahindra will operate from Zains premises in the first phase and will take over the premises and also operate from its own centers in the second phase.
He added, the company will also invest in new hardware such as desktop computers and take over Zains existing hardware at depreciated value, depending on its condition.