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Essar Group unit buys AOL call centre in India
Mon Mar 31, 2008 7:00am ET
BANGALORE, March 31 (Reuters) - A unit of India's diversified Essar Group said on Monday it had agreed to acquire the call centre operations of Time Warner Inc's AOL in India for an undisclosed sum.
Aegis BPO Services, the back-office unit of Essar, will provide customer service and technical support to AOL customers, the Indian firm said in a statement, adding the deal is expected to close by end of next month.
An Essar Group spokesman refused to comment on the deal's size, but local media citing unnamed sources had earlier reported AOL was close to selling its Bangalore call centre to Aegis BPO for about $100 million in an all-cash deal.
Aegis, which has more than 19,000 staff in call centres in India and the United States, counts American Express Co, AT&T, and Vodafone among its overseas customers, the company said. It also provides back-office services to firms in India's telecoms, retail, banking and insurance sectors.
India's revenue from back-office outsourcing is expected to surge just over four times to $50 billion by 2012 despite a possible recession in the key U.S. market, an industry report said in January. The sector has logged 35 percent annual growth over the last five years to hit annual revenues of about $11 billion, with the bulk coming from exports, said the study by lobby group NASSCOM and consulting firm Everest. The boom in business process outsourcing, or BPO, is built on a large, skilled and comparatively cheaper English-speaking workforce.
© Reuters 2008. All Rights Reserved.
Essar`s Aegis BPO acquires AOL arm
Bangalore April 1, 2008
Global internet firm AOL's call centre facility in Bangalore has been acquired by Aegis BPO Services, an Essar group company. The value of the deal was not disclosed by the companies. However, industry sources peg it around $30 million (Rs 120 crore).
Aegis will provide customer service and technical support to AOL customers, while the latter will transfer 1,000-plus of its employees. The acquisition is expected to be completed by April-end or in May.
The decision by AOL to sell its captive BPO operations comes after a few global companies started this exercise to cut costs. The trend was started by GE, when it reduced its stake in its BPO operations in India by selling majority stake in the business to two private equity players. Another global financial institution, Citibank, is expected close a similar deal this year. Aviva Insurance is another firm which is planning to take this route.
The acquisition comes as a shot in the arm for Aegis with an annual revenues of over $200 million and an employee strength of 19,000. Aegis CEO and Managing Director Aparup Sengupta said: "With AOL as a client, it gives a clear visibility to our portfolio and will strengthen our offshore customer management capabilities. AOL's competence allows us to get into the tech-support area covering voice and non-voice offerings."
At present, 85 per cent of Aegis' operations are in the voice category and the rest in the non-voice category. Acquiring AOL's call centre would aid the company in augmenting its operations and extending its horizontal services for new clients, Sengupta said - "We are already working with Fortune 500 companies in the banking and telecommunications sector."
AOL's Executive Vice-President (international) Maneesh Dhir said AOL would continue to strengthen its local operations. AOL commenced call centre operations in July 2003.
© Business Standard 2008. All Rights Reserved.
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