BANGALORE, India, 1 October 2003 — A US law requiring telemarketers to comply with a “do not call” list will deal a significant blow to Indian call centers, analysts warned yesterday, a day before the legislation comes into force.
President George W. Bush on Monday passed into law a bill which will enable the Federal Communications Commission to slap a fine of $11,000 on telemarketers who call people on a “do not call” list compiled by the Federal Trade Commission.
About 50 million Americans have placed their numbers with the commission’s registry and the law comes into force from Oct. 1. “It will definitely be a short-term blow to the Indian call center industry,” said Manoj Kumar, vice president of Call Junction, which helps such centers to set up shop.
“Half of the about 400 Indian call centers deal in telemarketing which survives on unsolicited calls. It is a business involving less than 200 people. Most of them will either close down or will have to reinvent themselves,” Kumar told AFP.
Global firms have of late outsourced their software and administrative work such as payroll accounting to Indian firms because of the cheap and quality manpower available in the country.
Two call centers based in the southern Indian city of Hyderabad have already closed shop and others are planning to focus on new technology areas.
Call World Technologies, Hyderabad’s largest call center, has already cut its staff from 240 people to 100 in anticipation of the US law. “We are looking to move away from telemarketing to client servicing,” said N.M.D Parveez, director of Call World. “Even before this ruling we had been facing a lot of problems because of non-payment of bills by clients. “Even though this is a temporary setback it has actually helped us to refocus our business,” he said.
India’s outsourcing sector logged about 60 percent growth in the year ended March 2003. It is forecast to grow by 55 percent to $3.6 billion in the current fiscal year. Last year it employed more than 100,000 people.