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BPO gives India's Silicon Valley a fresh impetus

BS Bureau in Bangalore | August 21, 2003 10:02 IST

Bangalore, the Silicon Valley of India, continues to be a preferred destination for a host of software companies: the first quarter ended 30 June 2003 witnessed a 45 per cent increase in the number of new business process outsourcing companies to commence operations here, when compared to the corresponding period last year.

About 13 new BPO companies started their operations in Bangalore during the first quarter of this fiscal.

This was announced by B V Naidu, director, Software Technology Parks of India, Bangalore on Wednesday.

While announcing that Bangalore will play host to the 2003 India Outsourcing Summit to be held on October 15 and 16, Naidu said the software industry in Bangalore will have a lot to gain from this summit which is part of Outsourcing World Summit Conference Series.

According to B V Naidu, director, Software Technology Parks of India, the investment from BPO companies in Bangalore has also witnessed a 51 per cent increase in the first quarter of this fiscal, when compared to the corresponding period last year.

"During the first quarter, BPO companies in Bangalore have invested close to Rs 500 crore (Rs 5 billion) for either setting up or expanding their operations."

While the total software exports from Karnataka is expected be about Rs 16,000 crore (Rs 160 billion) during the current fiscal, Naidu expressed confidence that BPO companies will have a 15 per cent share in these exports.

It may be noted that Karnataka exports during the previous fiscal was Rs 12,000 crore (Rs 120 billion) with the BPO contributing 8 per cent.

On the STPI-registered companies, Naidu said there has been a 36 per cent increase with nearly 45 new companies starting their operations in Bangalore.

These include both BPO and IT companies. Naidu estimates that Bangalore currently houses about 150,000 software professionals.

Speaking on a conference call from the US, Michael F Corbett, conference chair, president and CEO, Michael F Corbett & Associates said, "The world outsourcing market is estimated to be about $5 trillion according to Outsourcing Research Council 2002. Nearly 20 per cent of this is constituted by the IT and ITES market, which is growing at about 15 per cent per annum."

"Of this, India receives only about 2 per cent of the work, which indicates the huge potential," he said.

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