BT India chairman Arun Seth is a veteran of telecom industry. He was at the helm of BT''s operations in India when it took stake in Bharti's mobile operations in Delhi. BT has now limited its role in India to Enterprise segment. He is also an expert on outsourcing. In an interview he talks about managed services and outsourcing market in India. Excerpts:
Q: In your opinion what is the size of managed services in India and what percentage of that market you have captured?
The IT & ITES sectors, which are our key customers, alone is expected to exceed USD 40 billion in annual revenues and be $60 Bn by 2010. Strong demand for global delivery by this sector is felling demand for our Networked IT services. Its difficult to estimate the total needs of this sector but would estimate that they spend 10% on technology services giving a potential of $ 6 Bn. When you add the growing needs of Indian MNC's this just goes larger so I would say that this is not even a fraction of what lies ahead.
There is a huge market to be tapped, our challenge is to work closely with Indian companies that it's best to hand over fixed costs and non core areas such as network to companies like BT to manage as they focus on their areas of expertise and we make them agile with our Networked IT services.
Q: BPO and IT sector is growing at a very fast pace in India. Do you think that this growth will be sustained in near future? Do you think China will be a threat to India?
The IT & BPO sector growth story is perfectly poised to reach new heights and I am confident that the industry will achieve its ambitious target of USD 60 bn in exports in 2010. The China model is based on fulfilling mainly their domestic demand while India is more focused on Exports and hence greater demand for internationally focused networked IT services which play to our strength. China with its strong manufacturing and emerging MNC's is equally interesting for us. So we believe it won't be either China or India but both that will be a focus.
Q: Is BT considering the Mobility space or targetting the consumer segment with broadband and Internet services? Tell us about your stake in Tech Mahindra?
We are in India to serve the enterprise segment and there lies immense potential which is extremely untapped as we collaborate with our customers and help create opportunities. Our stated strategy is to focus on consumers with broadband and a full suite of services only in UK and outside the UK only on enterprises. So we will not be serving consumers in India .
Our relationship with Tech Mahindra dates back more than 20 years and we have a 35% stake in TM. This is a pure financial investment. We are very happy with this as they are key provider of services for us for our global delivery in IT and BPO platforms.
Q: What are BT's plans in India?
BT was essentially established in India to serve the connectivity needs of its multinational customers. Post our long distance licenses, we are keen to serve the requirements of a new breed of Indian companies, who are going global, that we have identified as, "Indian multinationals". As these companies go global and extend their geographical boundaries, communication is a major pain point in their expansion and integration. This is where BT steps in to assist them in embracing globalisation and lets these companies concentrate in doing what they do best. We provide high speed quality video and voice services over our own MPLS network which also enables more companies to maximize the benefits from BT's networked IT capability in the areas of Convergence, CRM and Security.
In a short span of time, we have gained leadership in the IT and BPO markets and are now extending our horizon to Indian multinationals going global with specific focus on BFSI, Media, Broadcast, Pharmaceuticals, IT and Hospitality sectors.