70% of Indian BPO companies headed for danger

Gartner forecasts that as much as 70% of the top 15 startup Indian BPO companies will be folding up in the months to come.

The analyst firm says that by the end of 2005, the top 15 of Indian-owned BPO startups offering customer call center services would be acquired, merged, or marginalized by then. It goes on to debunk myths created by all the excitement over the offshoring sprees with the cold fact: only a small fraction of customer service outsourcing will be done at offshore locations.

Since offshore call centers and offshore customer service outsourcing only make up a miniscule portion of the market, it is expected to dwindle in presence to less than 5 percent in 2007 from its current 5%.

In the meantime, the worldwide market for customer service outsourcing promises growth from $8.4 billion in 2004 to $12.2 billion by 2007.

The Gartner analysis also sees disappointing outcome for efforts of around 80% of outsourcing companies throughout 2007.

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