HERO GROUP BUYS SCOTLAND'S TOP CALL CENTRE OPRATOR
By Prasun Sonwalkar, London, 10 September 2007 (IANS)

The story of Indian companies taking over British businesses continues. The latest example is New Delhi-based call centre major Hero Group buying Scotland's largest call centre operator for £40 million. The Hero Group has bought the Isle of Bute-based Telecom Service Centres (TSC), which has more than 3,000 staff, mainly based in Scotland. The new company will be called TSC Hero. Hero has more than 1,300 staff working in call centres near New Delhi.

Seeking to allay fears of job losses to India, TSC chief executive Ken Hills insisted that the move would not lead to any jobs being shifted offshore, and that the company's UK operations were targeting more growth. There would be very little change in the day-to-day activities of the company, he said. He said, "This is not about taking UK jobs to India. On the contrary, TSC's clients have all made positive decisions to locate their operations in the UK.

"The change I am looking for and the reason we wanted to do the deal was to get access to more capital from a longer-term strategic investor to help us on to the next level of growth, but day to day I do not think the guys will see a huge amount of change," Hills added.

The Hero Group's takeover comes in the backdrop of several Indian companies recently acquiring UK and Europe-based businesses, the most high profile being Tata taking over Corus, Mittal Steel acquiring Arcelor and Vijay Mallya's United Breweries taking over Scotch whisky major Whyte & Mackay.

The latest takeover in the call centre industry also takes place in the context of several British companies that had outsourced work to India bringing the work back to the UK due to customer dissatisfaction over service provided by some Indian call centres. Hill said that TSC had formal relationships with some offshore centres. The latest deal increased its offering and was likely to win further business, he said.

He added, "Some of our clients already have offshore capability. What this allows us to do is provide them with services in the UK and offshore, with a facility that we manage and control, not just as a partnership with other companies."

Hero has bought majority stake in TSC from Lloyd's Capital Development (LCD), the private equity arm of Lloyds TSB Group, which had the majority stake in 2003. Since then revenue has more than doubled to £60 million.

LCD director Andrew McMurray said the move with an offshore partner such as the Hero Group was "a natural step" for TSC. He said, "It has developed into a leading UK player and we believe that with the creation of TSC Hero, the company will enjoy even greater success in the UK and abroad."

Hills said that there had been "some sale of shareholding" on the part of directors, though he would not disclose the levels. The management of the new company is to remain the same.

Formed in 1994, TSC has ten "contact centres", nine of which are in Scotland. In the latest accounts available, TSC made an operating profit of just less than £3 million on a turnover of £49.3 million. Its customers include Vodafone, HSBC and Hewlett-Packard.