BT gets flack for India outsourcing

By John Ribeiro

IDG News Service

BT Group PLC in London has once again run into criticism for outsourcing work to India after The Times newspaper in London reported this week that BT is using Indian software developers for core software development work such as creating IT systems and help desk software.

An undisclosed number of software developers from the joint-venture Indian company, Mahindra British Telecom in Pune, are employed in the U.K. at wages lower than those paid to similar workers in the U.K., according to the report.

BT denied that it pays workers from its subcontractors less than workers in the U.K.

“The total package of the Indian subcontractors working on BT projects is comparable to those of their U.K. counterparts and well above U.K. national wage. They do not lose out,” said a BT statement. “BT subcontracts a number of projects to Mahindra BT. The work is typically basic software maintenance on legacy systems. This approach allows BT’s software engineers to be freed-up to concentrate on other work.”

BT also claimed that its approach is good for BT’s British workers, as it means they can work on leading-edge developments; good for Mahindra’s India employees, who get excellent experience and the chance to work abroad; good for BT’s customers, who get the benefits from outsourcing, and also good for BT’s shareholders, for whom this approach demonstrates a well-managed company.

Mahindra British Telecom, with a staff of about 3,000 software professionals, does work for other customers besides BT, but revenue from BT contracts accounts for a majority of the company’s work.

BT’s move to outsource work to India had previously come under fire. BT Retail, one of the businesses of BT Group PLC in London, went ahead last month with plans to outsource call centres to two companies in India, despite protests from the London-based Communication Workers Union. One of the contractors, HCL Technologies Ltd. in Noida near Delhi this week bagged a US$160 million business process outsourcing order from BT to set up a dedicated facility in Noida, managed by BT, that will have about 1,000 people by the end of this year. BT has maintained that the call centres in India will not affect existing call-centre jobs in the U.K., a point contested by the Communication Workers Union.