MphasiS eyeing Chinese banking sector potential
Hindu Business Line, Feb 20, 2002.

MUMBAI, Feb 19, 2000: AT a time when China is being looked upon as a potential threat to the Indian IT industry, MphasiS BFL Software is eyeing Chinese banks and insurance customers as potential customers.

"China represents an exciting market for us. Chinese banks and insurance companies, with their immense software expenditure, are going to be big potential customers," Mr Jaithirth Rao, Chairman and Managing Director, MphasiS BFL told Business Line.

"In the next fives years, I expect the top five Chinese banks to spend at least a billion dollars on application development, integration and deployment. This is a huge number and since we are interested in the financial services sector, I think we should go and get our fair share," he said.

"As of now, we have one customer in China and are looking at striking some partnerships though it's too early to disclose any details. On the whole, you should see a good traction in the next 12 months as most Chinese banks and financial services companies are putting together big budgets for application software," he added.

Japan is yet another potential market where MphasiS already has two Japanese banks as customers. "We currently exploring a couple of partnerships and have already signed on a small company in Japan. There are immense growth opportunities in this market, but it will take time for us to ramp up because we have limited Japanese language skills," Mr Rao said.

Meanwhile, things are looking up the company's call centre subsidiary, MphasiS BPO.

"We seeing a lot of interest being generated in MphasiS BPO with a quite a few customer visits recently. In terms of business, most of the traction is coming from finance and retail; telecom is not doing all that well. MphasiS BPO currently has seven customers and we would like to add about one or two customers in a quarter," said Mr Rao.

While announcing its guidance for 2002-03, MphasiS had projected a 200 per cent growth for MphasiS BPO.

According to Mr Rao, "In this business, soft skills are far more important than physical infrastructure. And, the reason we are confident about MphasiS BPO is that we think we are very good at the soft skills: good at recruiting, training and deploying people without deterioration in quality."

Speaking about profitability of the call centre business vis-a-vis software development business, Mr Rao said, "We are focused on both businesses; software remains the bigger chunk, though it is sluggish right now compared to previous growth rates and call centres have an exponential growth potential. However, well run, both are equally profitable businesses (considering an offshore model for software) and if you look at our gross margins, MphasiS BPO is catching up quite fast with the software business."