The Hindu Business Line : Call centres hear no jarring note in NJ move

A POSSIBLE move by New Jersey to ban telemarketing could affect Indian firms offering outbound call centre services to US clients targeting, in a B2C (business-to-consumer) model, consumers at home in the US.

However, there would be a minimal impact on Indian companies offering business-to-business (B2B) outbound call centre services, according to industry sources.

In an outbound call centre service, calls are made from India to customers in the US to sell products or collect information or money on behalf of the client.

Call centre services can also be `specialised', including business processing wherein calls are made from one company to another in the US.

According to recent media reports, New Jersey may ban telemarketing sales pitches under the legislation that the Governor, Mr James E. McGreevey, signed into law last week.

The law would allow New Jersey residents to block telemarketer calls by placing their names on a `do not call' (DNC) list.

It also restricts the hours telemarketers may call.

The Indian call centre industry's size would likely reach Rs 7,500 crore in 2003-04 and increase to Rs 20,000 crore in 2007-08, with revenue from outbound call centre service forming a sizeable percentage, the sources said.

It could have a short-term "hesitation'' effect, but not in the medium to long term, according to Mr Avinash Vashistha, Managing Director of the Bangalore-based consulting firm, neoIT.

He said that such bans would not gather momentum in the long run, because private enterprise was driven by cost arbitrage and profit motive.

"More so with call centres, which work on economies of scale and country domain skills."

Clearly, the economics do not support sentiments.

"The State can impact business coming from State/Government agencies, but not from private business or multinational companies," he added.

Mr Adi Saravanan, Founder and President, Allsec Technologies, which provides call centre services, said that in the US, there exists a State-wide DNC list which needs to be used to scrub calling lists by every service provider, in the US or India or elsewhere.

"So, it is a matter of legal compliance to existing laws and having a system in place at the Indian end which will help in the adherence."

All Indian firms handling outbound solicitation need to follow the legalities. "They are already aware of the situation and are doing the needful," he added. Mr Saravanan also said that it was possible that more American homes might get into the DNC list.

However, it is impossible to predict a business loss since it largely depends on size of contracts and whether B2B or B2C.

"Different companies have different volumes of outbound calling in B2B or B2C and it has a lot to do with the mix."

According to Mr Vashistha, with industry lobbying, foreign Governments, private enterprises and industry associations such as Nasscom pitching in strongly against such moves, it would be just a matter of time before the ban fizzles out.

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Call centres hear no jarring note in NJ move