"Cultural proximity to the US together with availability of talented manpower are key reasons as to why BPO companies prefer expanding their operations in Philippines," Mr Rawat said.
Expansion of non-English BPOs in Tier-2 and Tier-3 cities, to provide low cost services to the telecom and aviation sectors, are set to play a significant role in growth of domestic outsourcing industry, the report found.
"Lower attrition rate in smaller towns is a big positive owing to lower recruiting and training costs, while there is comparatively high attrition rate of 30-35 per cent in tier I cities. Transportation costs for BPO employees and real estate prices are also lower in smaller cities," Mr Rawat said.
Cities like Ahmedabad, Chandigarh, Coimbatore, Dehradun, Jaipur, Kozhikode, Nagpur, Nashik and Palakkad can help meet 50-60 per cent of the projected talent requirement of BPO industry over next five years, the report said.
Government projects like the National e-governance Plan (NeGP) and the Unique Identification Authority of India (UIDAI), among others, are likely to provide a fillip to the domestic BPO sector in smaller cities, it added.
