India's business services to be the jewel in BT's crown

BT is looking increasingly to markets like India and China to make up for falling revenues in its domestic market. BT group chief executive Ben Verwaayen and Andy Green, chief executive of BT Global Services, are flying out to China this week "to drum up business" for BT's business services arm. A spokesman said: "BT has bold ambitions for the region. The fact that Ben is flying out there shows how seriously BT is taking these new markets."

In an interview with The Business, Arun Seth, chairman of BT India, explained why he believed it is India rather than China that is set to become the jewel in BT's crown. "While China has essentially become a manufacturing centre, it is the growing success of India's IT companies like Infosys and Wipro that will drive communications growth," said Seth. "India's IT industry is worth $25bn (13bn, E19bn) in exports a year and growing at 25 percent-30 percent per annum. Companies like these have a rapidly growing requirement for global communications services."

The Indian IT industry is growing so fast it has recently started scouring the whole of India for graduates to fill its growing number of vacancies. The National Association of Software and Services Companies (Nasscom), India's IT trade association, last month began testing graduates for employment in multinational services firms. In collaboration with India's 26 largest firms, Nasscom is reported to have designed a test to determine a graduate's ability to work for foreign clients.

As well as providing network services to India's growing IT companies, BT also believes that global players from outside India will also require its networking services. "Companies like Unilever, Dell and HSBC are expanding in India and have an increasing need for networking services."

According to Seth, BT is constantly cutting deals with local network operators to enable it to offer a one-stop-shop to corporations wanting a global network without having to strike telecoms deals in each new geography they enter. "BT does not, for example, have a licence in India, although we are in the process of applying for one. But we do have partnerships with operators like Bharti," said Seth. "By negotiating with local operators around the globe we can become the single point of supply for a corporate client." For example, Reuters is a major client, with operations in 170 countries. When BT is representing up 10 different corporations in a country, it can use economies of scale to negotiate better deals than those companies can.

Growth in Indian telecoms networking services is also being driven by multinationals outsourcing to cut costs with services such as call centres and help desks requiring global services such as that provided by BT to enable low-cost calling from customers based in locations such as the UK. BT's Andy Green was recently in Bombay to attend the stock market debut of software services firm Tech Mahindra, a joint venture between BT and Indian telecoms software company Mahindra & Mahindra that was 78 times oversubscribed and raised $100m.

BT has said it intends to increase Indian revenues from under $100m to $250m in the next three years. It also intends to invest around $10m on a research centre in India and intends to increase its 12,000 workforce in India by around half.