Servicing telecom companies forms a sizeable chunk of the domestic BPO market and of this three key players -- Tata Teleservices , Vodafone and Idea Cellular -- are in the process of finalizing multi-year BPO contracts of around Rs 500 crore in the next couple of months.

The telcos are also expected to consolidate the BPO work among fewer vendors, which means the winners will get a larger pie of the contract according to a report in the Economic Times.

Tata Teleservices and Idea are already believed to have send out floated requests for proposal (RFPs). The outsourcing contracts this time round are expected to be a mix of inbound and outbound services, including customer retention, cross-selling and payment follow-up.

The contracts are expected to require 500-1 ,000 seats each and have been estimated to be in the range of Rs 150-180 crores per teleco. The paper quoted an industry expert stating that with the existing telcos either expanding into new circles (Idea) or launching new services (GSM launch by Tata Tele), customer support requirements are growing and telecom companies are also looking at fewer vendors to ensure greater quality control.

The new BPO deals will mean a new opportunity for BPO firms such as Aegis, Serco (formerly InfoVision), MphasiS and Spanco. Most of these firms already cater to multiple telecom operators. For instance, Aegis provides customer support services to four leading telcos — Bharti Airtel, Vodafone, Idea and Tata Teleservices.

According to research by ValueNotes, outsourcing of services in the telecom sector is expected to grow to Rs 2,770 crore by FY12 from Rs 720 crore in FY08.