Telcos drive US$5.4bn Asian outsourcing market

Companies in Asia-Pacific signed more than US$5.4bn worth of business process outsourcing deals in the first half of the year, according to a recent survey.

The figure represented a 100 per cent increase compared to the same period last year, indicating that outsourcing market expansion in the region is outpacing the rest of the world, which has shown little growth.

The telecoms sector accounted for close to half of Asia-Pacific outsourcing during the survey period, in part due to major contracts from China Mobile, the world's largest mobile phone firm by subscriber base.

Outsourcing by the financial services industry fell to nine per cent of the total.

The survey, conducted by consultancy TPI, included only new outsourcing contracts with a value in excess of US$25m where most significant outsourcing activity occurs.

The growth seems to herald a new maturity for the Asian market, TPI researchers believe.

"Traditionally the Asia-Pacific outsourcing market has been seen as relatively immature in contrast to the American and European markets and thus prone to peaks and troughs in activity," said Arno Franz, TPI's managing partner for the region.

"However a strong performance in the region in 2006 has carried on through the first half of 2007 and we have seen three straight half-years of growth in new business demand.

"There are signs that the Asia-Pacific outsourcing market has steadied. Indeed strong growth in Asia-Pacific and Europe is compensating for a very soft US market, where new outsourcing business is at its lowest level since 1994."