Aviva, the world's sixth largest insurance company, is set to enter the Indian BPO sector. The UK-based firm is going to buy a majority stake in the Bangalore facility of BPO company 24/7 Customer.

This facility in Brookefields, Bangalore, called Aviva 24/7, is currently a 100% subsidiary of 24/7. Aviva's deal with 24/7 is based on the Build, Operate, Transfer (BOT) model. This gives Aviva the option to acquire the operation, including staff, from 24/7.

The 1,700-seat Bangalore facility has been valued at around $25 million. Aviva's right to exercise the option to buy is coming up in June 2006. They will buy a majority stake in the 24/7 subsidiary. Aviva will give some equity stake to 24/7 Customer to keep them accountable for the organisation and maintain the quality of services.

However, the exact equity stake that Aviva will buy is not yet known. The company has made it clear that Aviva would apply a BOT model for its offshore operations and that ownership of the Aviva element of the offshore operations would transfer to Aviva at the appropriate time.

Its offshore strategy remains unchanged. Its relationship with Aviva involves transfer of its call centre to them at a mutually agreed date. Aviva's business processes and IT outsourcing operations in India and Sri Lanka are managed by Aviva Offshore Services in Pune.

Besides 24/7, the Aviva also outsources work to ExlService Holdings (centres in Pune and Noida)and WNS Global Services in (Pune and Colombo). EXL's Noida facility and the Chennai facility of 24/7 Customer do not, however, come under the BOT model.

(http://sify.com/finance)