Massive growth potential awaits call centres as IT-enabled services from India is expected to account for 38 per cent of the global market by 2005, according to a KPMG report.
"According to estimates, of the global market for ITES at $611.4 billion by 2005, services that can be provided from India account for as much as $234.4 billion," states the report quoting Gartner.
The report, however, points out that the actual market share achieved by India will depend on its ability to compete with other ITES locations.
However, there are factors that could hamper India's potential. "The inadequacy of infrastructure, deficiency in adequate skills for the long-term and lack of foresight around regulatory reforms have led to business constraints for ITES providers in India impinging on their ability to compete in the global marketplace," stated the report, titled IT-enabled Services India- A Focus on Competitiveness.
The report points out that convoluted licensing process with multiple authorities involved is leading to excessive investment. "Indian ITES providers face considerable delay and higher investments associated with getting regulatory approvals from multiple agencies. This also affects their ability to respond fast to market demands," the report points out.
Referring to the telecom infrastructure in the country, the report points out that inadequate competition has led to slow response time in bandwidth provisioning and artificially high international communication costs.
"For example, provisioning an international leased line can take 8-12 weeks, which runs the risk of the client opting for another country. The cost of a 64 kbps link between India and the US is around $5000 a month, while that between UK and the US is $2000 a month," the report said.
Pointing out that India lags behind other competitor countries in the area of property infrastructure, the report points out that spiralling real estate costs in metros are forcing companies to establish their backoffices in suburbs and satellite towns where support services are inadequate and more expensive.