Internet Outages Hit Outsourcing in India

Internet slowdowns in the Far East and Middle East could hurt companies that outsource call centers, customer service, general back-office tasks, a...
Stephen TaubJanuary 31, 2008

Massive Internet outages caused havoc to India’s flourishing outsourcing industry on Wednesday, according to the Associated Press, which reported that the Internet Service Providers’ Association of India said the country had lost half its bandwidth.

The outages, which caused a slowdown in traffic on the Dubai stock exchange, could affect the many U.S. and European companies companies that have farmed out their call centers, customer service, general back-office tasks, finance functions, and other operations to India.

Rajesh Chharia, president of Internet Service Providers’ Association, told the AP that the companies that serve the U.S. East coast and Great Britain have been among the worst affected. Some companies were rerouting their Internet service through cables running under the Pacific, he said.

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Besides India, the wire service said, users Pakistan, Egypt, Qatar, Saudi Arabia, the United Arab Emirates, Kuwait, and Bahrain were affected.

The problem occurred when two undersea cables off the Mediterranean coast of Egypt were snapped Wednesday afternoon, causing major business delays and halts in Internet traffic in parts of the Middle East and Far East, according to AP.

Engineers in several countries were trying to reroute traffic to satellites and to other cables, the wide service reported. Officials told the AP that it could take at least a week to fix the cables. “Telecom and bandwidth are the bedrocks of the IT industry,” Ajit Ranade, chief economist at the Aditya Birla Group, an international manufacturing and services company, told AP. “If something happens to the bedrock, obviously the IT industry will suffer.”