Sramana Mitra: How much of your business is catering to the India market, Manish?
Manish Dugar: At this point, it is miniscule. It’s less than 5% of the BPO business that is [from] customers; however, we intend to get to a model where in we get similar profitability and buy outsourcing work, we also get similar profit per person by doing work for India. Otherwise, it goes against the grain of our entire philosophy of nonlinear growth.
SM: You are saying you want to reduce some of your dependency on foreign business and create Indian business, but you don’t want to change the profitability structure of that business to do business in India; you still want to maintain similar profitability structure?
MD: You are right on the latter part, which is that I want to come up with a delivery model and a cost structure that can deliver to me same average percentage and average per person, even by delivering to India customers. However, it is not to say that I want to reduce my dependency on foreign business and grow India business alone.
SM: Of course not. I’m just wondering if you want to higher percentage India business in your business mix. Is that accurate?
MD: Well, I don’t think it is either-or. The point I’m making is it’s not either-or, and I guess, we would like both pieces of our business to grow. If the one grows faster than the other, then yes, a percentage of the total will certainly change.
SM: Okay. What do you think is the timeframe in which you are going to have a viable you now rural BPO business supporting the India market at some scale? And you define scale for me. I spoke with a guy who runs TCS in Latin America, and he was saying that by 2015 TCS is going to have 25.000 people in Latin America. So, give me some sort of a target for Wipro in India as far as rural BPO is concerned.
MD: For the Indian market to be solved, a combination of rural BPO and franchise model which, again, will go to either franchises operating in the cities or operating from rural locations. A combination of these two has to solidify. As I said, we just started the pilot, So, as far as rural is concerned, and we will have the first set of employees starting to deliver from the rural location in about a month’s time from now. Two things to be then tested out. One is scalability of that center, and second is our availability to create many more sub-centers, and create work. I would give about nine months to twelve months for me to test out whether creating this network is possible and whether it is a viable model. In 12 months time, if the proof of concept works out, I would say that it has the potential to become at least 20 to 50 centers and that will translate to about 5,000 to 10,000 people.
SM: Do you have any preference? Is it more in south India?
MD: Within India, we have regional languages and dialects all over. If we intend to get into a business which will need to require regional language capabilities, maybe we will have to have a distributed center set up, but currently, we are primarily looking at the western and southern parts of India.
SM: Is the infrastructure in the heartland of India, as I call it, whether it is a third tier of towns or rural India, are there any parts of India that are substantially better than others?
M: When it come to rural areas, I would say the infrastructure is not very different because our expectations are also not very different. We are not expecting 99.9% uptime ontelecom. We are not expecting total 100% power back up and so on. The kind of buildings and the kind of infrastructure we will be looking at will also be a little different from what we will do for international operations in tier one cities. The basic requirements that we have from a rural BPO, I think all the locations that we currently are thinking of or that we believe are going to be viable, all of those locations that provide the basic infrastructure we expect.
SM: Okay. Let’s go to Romania as the next country. What has been your strategy in Romania, and what are the dynamics of that market? How many people do you have? How do you navigate that market?
MD: Continental Europe, if you look at it, there are primarily three regions which you can split it into. Primarily, based on the language capabilities and the culture, which at times necessitates you to be there for the client to be giving business to you. These three regions are typically in order of the — and I am talking outside of the UK — these three regions are the first the Romanias and Polands of the world. There is the Nordic region where you get Swedish and Finnish languages. And then you have the German and the Austrian part where they are culturally very sensitive and you are expected to be there to be able to get the local business. So, we currently are in Austria. We currently are in Romania, and Romania has been a good success story for us. It’s scaled up to more than 1,000 people. Most of the work we do there is the continental European part of the large clients that we deliver from various locations.