'India losing edge in voice-based outsourcing'

When I lived in the Philippines in the late 1980s, everybodyspoke English with an American accent, there were jokes about being the "51stUS state", the US military had a huge presence, and the economy was heavilyindebted to a consortium of mostly-American banks. Fifteen years later I waslistening to a JP Morgan executive in an office in Makati,the business district in Manila,tell me about how many more "seats" the investment bank had set up in its backoffice. The densely-packed tall buildings in Makati were buzzing with young Filipinos 24hours a day and coffee, pizza and sandwich bars were doing roaring business.Another seven years down the road, Philippine call centres are eating India'slunch, and Indian firms are the stuff of much online mirth - they have evenspawned the popular NBC sitcom Outsourced, where the "lovable" Todd Dempsey isparachuted into a faux-Mumbai to run a bunch of, well, Indian caricatures, andthey were grist for Chetan Bhagat's pulp mill.

We say "IT-BPO" in the same breath, but the reality is thatwith few Indians truly proficient in English, the absence of a cleargovernment-industry-university nexus on training and skill development, absurdstaff turnover as our young and restless hurtle from one job to another, andeven, as NASSCOM's Som Mittal put it recently, the need to take care ofeverything from transportation to protection for women call centre employees atnight, India has just about priced itself out.

"When you get to the Philippines you will notice thatall of their signage, their billboards, their radio, their TV, everything thatthey talk about is in English. You'll find that their favourite sport isbasketball, and they follow the NBA more closely than we do here in America… It's avery Americanised culture," says Tom Milligan of Vector BPO in a provocativeYouTube clip. So, how are Indian firms fighting back?They may be losing the voice battle, but that does not mean the end asAssociate Editor Goutam Das and Special Correspondent Sunny Sen describe in ourcover story.

The state assembly elections have blown like a scorchingdust storm through the corridors of power. For the second time in a row, UttarPradesh has voted in a government with a clear majority. Mulayam Singh Yadav,as much as Mamata Banerjee, Jayalalithaa, Naveen Patnaik, Nitish Kumar, orPrakash Singh Badal, can stand up to the Congress party on everything fromsecurity to economic legislation. This issue hits the news stands just before theBudget, and we do not expect pleasant surprises. Will populism trump prudence?Read our election analyses.

With stock markets as volatile as they are - the BSE Sensexfell to its lowest close in five weeks the day after the election results - howwill investors behave? They certainly seem to be chary of routing their moneyto mutual funds. Twenty-three of the 44 fund houses for whom data is availableare carrying forward losses, and as Assistant Editor Rajiv Bhuva notes, retailinvestors, who make up 97 per cent of the investor population, accounted for amere 24 per cent of mutual funds' assets under management as of September lastyear. Bhuva's analysis is one of the key features in Business Today's specialpackage on mutual funds. In 1993, BT and Value Research, both very new then,came out with India'sfirst-ever risk-adjusted performance ranking of mutual funds. This annualranking continued till 1998, when the association broke off. This year, ValueResearch and BT have again come together in an exclusive partnership to rank India's bestmutual funds. But the ranking categories are completely different and targetedat investors' risk-return profiles. You will profit by our study.