Aegis bags $2-bn business in Saudi deal

Joins hands with Saudi Telecom to offer BPO service; partners to have near equal stakes in venture

Aegis, the outsourcing services company from the $15 -billion Essar Group, today entered into a partnership with Saudi Telecom, Saudi Arabia’s largest telecom operator, to set up a joint venture. The deal, under which Aegis will get business worth $2 billion (around Rs 9,000 crore) in eight years, is being touted as the largest in the business process outsourcing segment.

The venture — Call Centre Company — will have a near equal stake from both the companies. STC will hold 50 per cent and one share in CCC, and Aegis the rest. Aegis would also have operational control and responsibilities, and CCC would enjoy an exclusivity contract with Saudi Telecom Co (STC). While CCC will provide customer care service to STC’s 28 million customers in Saudi Arabia, the JV will also scout for regional opportunities.

“This is certainly one of the largest organic deals for the company, as well as the industry. It will have an IT component as well; this also validates our strategy of growth. So far, we have focused on an inorganic route but now we have the ability to pull off such a large organic deal. Also, we get an assured business of $2 billion over the next eight years. Though we have not sized the local opportunity, the deal clearly catapults us as one of the biggest players in the region,” said Aparup Sengupta, MD & Global CEO, Aegis.

As part of the deal, STC will move around 5,000 of its employees to the company in phases. In the first phase, STC would transfer about 550 agents across two centres providing directory assistance to the joint venture. Over the next 18-24 months, the balance 4,500 STC customer care agents would become part of the Aegis family. Sengupta said the idea was to double the JV headcount in the next two to three years to 10,000.

For STC, this means it can release its fixed cost and free up their management bandwidth to focus on emerging opportunities. “This would also provide a huge leg-up to Aegis’ West Asia presence, since the joint venture would actively seek new businesses. We have aspirations of making this the largest BPO operations in the region,” he said.

“STC has been a pioneer in the telecom landscape in Saudi Arabia and has now broadened its horizon to focus on other growth markets like the GCC, Africa, and India. It's time for us to increase our focus on our core operations, which is providing next-generation telecommunication service to our customers. We are happy to have found an able partner in Aegis, who, we are confident, would provide great satisfaction to our customers, given their vast experience in managing customer experience across multiple geographies,” said Saud Al Daweesh, Group CEO, STC.

Industry analyst say this was one of the biggest deals in the West Asia telecom segment. “This deal will encourage a lot of services provider to pursue business in the region. This also legitimises the offshoring model the Indian services provider pursue,” said Alok Shende, Principal Analyst, Ascentius Consulting.

Aegis, serves 150 clients through a network of 47 delivery centres across 11 countries. It has more than 50,000 employees and serves a diversified base of customers.