Essar’s acquisition of AGC Networks raises storm among back-office firms
Recent acquisition of AGC Networks from Avaya, a leader in enterprise communication technology, by Essar group of India for $44.5 million has caused a flare-up among Avaya’s back-office clients in India. Following the buyout, Aegis, the business process outsourcing arm of Essar group, not only owns approximately 59 per cent stake in AGC, but also contends with other back-office firms in India.
It may be mentioned here that till June 2009, AGC not only represented Avaya in India, but was also its sole collaborator in the country holding as much as 80 per cent of the market share for Avaya’s products.
These back-office firms in India are apprehensive that classified information may be disclosed to business rivals. In addition, several firms that have long-established agreements with AGC are also concerned regarding the declining service quality following the departure of Avaya – the parent company. In fact, a number of these firms have also contacted Avaya’s Indian auxiliary Avaya India with the plea to purchase services precisely from it and not via AGC. Quoting a BPO official, a financial website reports that they have expressed their worries to Avaya India and have received assurance that Avaya’s subsidiary in India will take care of pre-sales as well as offer parallel pricing to all these back-office firms.
According to Avaya India managing director Jangoo Dalal, the company’s go-to-market strategy has been to buy paraphernalia and integration prerequisites that were to be done by channel associates and Avaya India would also deal with equipment purchases in exceptionally vital circumstances. He further said that they would work jointly to resolve any interruption in regards to AGC, which is an autonomous listed organization. Nevertheless, further than this arrangement, the clients were also able to work with new business associates or contact Avaya India, he said.
Meanwhile, a senior BPO official, who spoke on the condition of anonymity, said that several business process outsourcing firms were contemplating to sever their association with AGC since Aegis owned it now. He further said since technology is among the largest expenditures for a business process outsourcing firm, any information regarding pricing and discounts may prove to be a competitive lead. According to him, his company may be compelled to assess alternatives, including utilizing services of rival technology providers like Cisco or another channel partner of Avaya – HP, IBM and Orange Business Services.