Call centre services player Teleperformance had its bi-annual briefing this week. The company hopes to reach revenues this year of €1,540 billion (up by 8% organically) and an operating margin of 10% (vs. 9.5% in 2006). After its recent acquisitions in Germany of Twenty4Help, a technical helpdesk specialist with revenues of around €100 million and its acquisition of the call centre services activities of the French subsidiary of UK-based Carphone Warehouse (around €45 million in revenues), the company wants to make further acquisitions in the US and in the UK in growing activities such as technical helpdesk and debt collection.

Comment: There was plenty of food for thought in this week’s Teleperformance briefing. Firstly, its recent Twenty4Help acquisition is presented as the largest European technical helpdesk operator in Europe. The company is merging with Teleperformance’s own technical helpdesk unit (TechCity) to create a new player with revenues of around €160 million. The new unit provides services not only to ADSL/broadband Internet providers (obviously a growing market) but also to high- tech clients such as Microsoft and Sun to provide hardware and software support. The range of services that the new unit provides is wide and even goes as far as remote server management. Clearly, we are touching on the boundary of IT services here.

Secondly, today, the company has 12,000 seats in low cost countries - that’s about 20% of its seats. That’s certainly less than a number of US competitors have done recently. We think this is a sound approach. Call centre services, especially for addressing non-technical issues in the consumer market remain an activity where native knowledge of a language is a must in EMEA. 

Thirdly, Teleperformance is investigating how and when it will move into other forms of BPO. The company is envisioning expanding into activities such as invoicing - activities that would require both call centre and document processing capabilities. The management of the company remained somewhat vague about its intentions. However, what this signals is that Teleperformance will move away from being a pure call centre player.

Teleperformance believes it will overtake Convergys as the number one player in call centre services worldwide, ahead of key competitor pure-plays such as West Corp, Teletech and the recently merged Sitel/ClientLogic.

Simultaneously, the press reported that French mobile operator SFR was going to externalise three of its four call centres servicing the consumer market. The deal is not finalised and will require negotiations and approval from the trade unions. The press reported that under the agreement, Teleperformance would roughly take over 1,300 members of staff while a German subsidiary of Beterlsman, Arvato Services would take 600 staff. The numbers of the deals still need to be confirmed. If they are correct this could be a sign that the French market is now ready for very large deals: the SFR-Teleperformance could bring between €25 million and €40 million of revenues a year alone.

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This article is an extract taken from Ovum’s EuroView Daily Comment service. Providing our expert’s views and opinion of the important news and events in European IT & Telecoms, this daily email bulletin is a component of Ovum’s EuroView advisory service.