IT Enabled Services In the elite league

March 2005

IT Enabled ServicesIn the elite league

March 2005

IT Enabled Services

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

India - An Introduction

Over 1 bn

35

3.3 mn sq kms

22

English

US$ 534

US$ 650 bn

Population

States/UTs

Geographical Area

Languages recognised

Business language

Per Capita Income**

GDP****(at factor cost & at current prices)

1USD=43.54 INR (as on July 4, 2005)Source:CSO Statistics

March 2005

India - Fast pace Growth

Largest democracy

4th largest economy by PPP index

6th largest energy consumer

ForEx reserves skyrocket from US$ 42 bn (2001) to

USD 133 bn (February, 2005)

GDP growth to continue between 6-8%

3rd largest economy by 2050: Goldman Sachs

Leading in IT & BPO

Oil & Gas and Biotechnology sunrise industries

March 2005

India - Leading the world

Hero Honda - largest manufacturer of motorcycles

Moser Baer - 3rd largest optical media

manufacturer in world

Pharmaceutical Industry - 4th largest in world

Walmart, GAP, Hilfiger sources more than

USD 1bn worth apparel from India

100 Fortune 500 have set R&D facilities in India

including GE, Delphi, Eli Lilly, HP, Heinz and Daimler

Chrysler

March 2005

IT Enabled Services

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

IT Enabled Services

Key driver of growth for Indian IT industry

Market Size

2002-03 US$ 2.3 billion

2003-04 US$ 3.6 billion

Growth 52%

March 2005

IT and ITeS Market

2002 - 03

2.4% of GDP

16% of exports

2008

7% of GDP

35% of exports

March 2005

Segments in ITES-BPO Sector

Medical transcription

Legal database processing

Digital content development

or animation

Online education

Remote maintenance

Engineering and Design

Specialised-Vertical specific

Contact centres

Telemarketing/pre-sales

Consumer care

Technical support

Back office operations

Data processing

General

March 2005

BPO Services

Sales to grow2003 US$ 709 million2006 US$ 2572 millionCAGR 52%

Marketing to grow2003 US$ 609 million2006 US$ 2188 millionCAGR 62%

Source: International Data Corporation (IDC)

March 2005

Changing Revenue Streams R

elat

ive

impo

rtanc e

thre

e ye

ars

late

r Banking / Finance Insurance

eCommerce Telecom Software

Airlines Medical/Entertainment FMCG/

RetailComputerManufacturing Pharmaceuticals

Chemicals Utilities Energy Equipment

Steel

Current relative importance

Low

Low High

High

March 2005

IT Enabled Services

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Domestic ITES-BPO Service Providers

Wipro Spectramind

HCL Technologies BPO

EXL Services

Hinduja TMT

Sutherland Technologies

ICICI OneSource

Datamatics Technologies

Epicenter Technologies

Hero Mindmine

24/7 Customer

March 2005

Global ITES-BPO Players

GE Capital International Services (GECIS)

Standard Chartered

American Express

HSBC BPO unitHughes BPO Services

e-Serve International Ltd

IBM

Dakshe-services PvtLtd.(a part of IBM)

AOL

JP Morgan Chase

Computer AssociatesHewlett Packard

eFunds

HealthScribeIndia

ADP Wilco

CapMarkOverseas Processing India

Dell

Microsoft

OracleDeloitte Consulting

March 2005

IT Enabled Services

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Outsourcing Destination

Offering best combination of cost-quality-scalability

Global quality standards -Six sigma, COPC, ISO 9001

Healthy mix of MNCs and Indian companies

More than 210 companies registered with NASSCOM

March 2005

BPO on the rise

Share of ITES-BPO sector in total revenues of India`s

IT software & services industry has increased

1998-99 6.5%

2003-04 29%

March 2005

Grow with India

Contribution of IT Enabled Services in total ITexports

1999-200020%

2000-200120%

2002-200333%

2001-200227%

ITES-BPO sector

2004 -05 ( Projected) US$ 5.1 billion Growth of 40%

March 2005

IT Enabled Services

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

India Advantage

Low manpower costs

High qualityLow

real estatecosts

Capitalise on time zonedifference

Proficiency in English

Reliable infrastructure

Vast pool of knowledge

professionalsPrestigious institutes like IITs

March 2005

Competitive Cost

Breakup of Costs for India (USD Cost/ FTE)

52%

8%

20%

7%13%

Personnel

G&A Expense

Telecom

Property Rentals

Depreciation

Breakup of Costs for USA (USD Cost/ FTE)

73%

15%

3% 4% 5%Personnel

G&A Expense

Telecom

Property Rentals

Depreciation

Source: Industry Sources, Merrill Lynch, 2003

Manpower costs

70 - 80% lower

than

in US/UK

March 2005

ISO:9001:2000

Partnership Driver - Skilled Manpower

Global Growth in Working-AgePopulation (15~64) Over the Next

Six Years (Mln)

3 7 5

8 3

7 3

5 6

4 1

3 8

2 0

1 3

0 .0 4-3

Availability of SkilledManpower, 2003

7.47.37.27.17.17.06.6

5.75.3

4.3

8.97.9

7.36.9

6.45.8

3.9

6.76.7

Growing Knowledge Pool

Source: IMD Competitiveness Yearbook 2003Source: UN, Morgan Stanley

March 2005

India Competitiveness

Productivity

20%higher

Quality

30%higher

March 2005

Central Policy Advantage

Tax breaks

Bandwidth sharing between multiple entities

Internet and IPLC connectivity on same LAN

Duty-free imports of capital goods

Income tax exemption on exports

Fast track approval for projects

Relaxation in regulations

100% FDI in Call Centers

March 2005

State Policy Advantage

Assignment of priority sector status

Cheap power and real estate

Concessions in taxes and various fees

Latest technology for infrastructure

Favourable legislation

IT parks

March 2005

India - An offshore destination

73%

4% 4% 4% 2% 2% 2%

20%

0%

25%

50%

75%

March 2005

IT Enabled Services

India - An Overview

Market and Growth Potential

Players

Opportunities

Why India?

Contact in India

March 2005

Contact in India

National Association of Software and Service Companies (NASSCOM)

International Youth CentreTeen Murti MargChanakyapuriNew Delhi - 110021

Tel 91 11 23010199Fax 91 11 23015452 Email info@nasscom.org

March 2005

Contact in India

MAIT

4th Floor, PHD HouseOpp. Asian Games VillageNew Delhi 110 016

Tel 26855487/26866976/26866976Fax 26851321Email mait@vsnl.com

March 2005

Contact in India

Confederation of Indian Industry (CII)

249-F, Sector 18, Udyog Vihar Phase IVGurgaon 122015

Tel 0091 124 5014060-67Fax 0091 124 5014080/5013874E mail s.ray@ciionline.org