| TPI in its latest report has said that fourth-quarter results lifted 2005 to the highest number of outsourcing transactions ever awarded in the broader market, for contracts equal to or greater than $50 million. A total of 293 contracts were awarded, up from 269 contracts last year. |
| "The December surge in industry-wide mega deals produced a nice finishing surge for 2005 but was not enough to meet 2004 TCV level and it dipped by five per cent year-on-year to $75 billion," Siddharth Pai, MD, TPI India said. |
| Total contract value for this quarter's mega deals, transactions valued at $1 billion or greater, was the highest since third quarter 2004. Six mega deals were awarded this past quarter, with five in Decmber alone. |
| Total mega-deal value for the quarter was $11.2 billion, representing 40 per cent of the full year's mega-deal value. With less than $27 billion of mega-deal TCV, 2005 produced the lowest TCV in this large-transaction category since 1996, TPI noted. |
| The advisory firm further added that on an annualised revenue basis, it sees the overall commercial outsourcing market as flat, driven by continued declining growth in IT outsourcing value. "The IT outsourcing market value has been marked by steadily declining, single-digit growth rates in the past few years. |
| If such trends continue, we predict that 2006 and 2007 will witness the first years of absolute decline in overall revenue derived from commercial IT outsourcing. However, a healthy growth rate for annualised revenue is projected for BPO at between 10 and 15 per cent in 2006," Pai noted. |
| TPI also said that 2005 was remarkable for an unprecendented concentration of contract restructurings, which represented 24 per cent of TCV in the broader market, compared to a historical average of 15 per cent each year. |
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