With a total contract value (TCV) of $24.7 billion in the third quarter, the global outsourcing market is taking an upward direction. Select network operations outsourcing contracts handed out by telecom carriers are the biggest market drivers.

Overall, this was the highest quarterly TCV that the market saw since the fourth quarter of 2008 and reported a rise of 21 percent sequentially and 40 percent year-on-year, according to sourcing data and advisory firm TPI.

TPI noted that going forward there could be a pent-up demand underlying a market that deferred decisions in economic downturn. The market is expected to begin turning upward in 6-9 months, it said.

During the quarter ended September 2009, as many as 139 transactions were recorded. The Global TPI Index — which provides a quarterly snapshot of the sourcing industry — tracks commercial contracts valued at over $25 million. “However, excluding the five transactions in which telecom carriers outsourced network operations to telecom service providers, TCV reached only $17.2 billion,” it said.

The year-to-date (January-September) TCV stood at $62.6 billion, 10 percent lower than a year-ago period with telco-to-telco contracts; and 23 percent lower without them. Telecom, diversified financials, transportation and utilities are among verticals that are have been demonstrating momentum according to Hindu Business Line.

The mega deals (contracts worth over $1 billion) fared better. The mega-deal TCV touched $13.7 billion in the third quarter, the highest since the last quarter of 2002. Excluding the telco-to-telco contracts, four mega deals were signed, the same amount in the last three quarters combined.

In the third quarter, network operations outsourcing accounted for $7.5 billion of TCV — over 30 percent of the broader market’s value. The TCV of the 94 IT outsourcing contracts awarded in Q3 touched $20.1 billion, 14 percent higher than previous quarter and the highest total since the last quarter of 2003.

BPO demand remained tepid as companies found it easier to pursue IT outsourcing contracts in the current environment rather than large transformations of their finance and accounting, HR functions, or facilities management and financial services outsourcing that were popular last year. Year-to-date, BPO TCV was down 45 percent from a year-ago period, and the number of contracts was off 25 percent, says TPI according to Hindu Business Line.

Solidifying its position in the global market, Asia-Pacific awarded 24 contracts worth at $6.4 billion. In the America, 47 contracts valued at almost $12 billion were awarded in Q3, up over 100 percent sequentially on the strength of telco-to-telco activity. In Europe, West Asia and Africa, 68 contracts valued at $6.5 billion were inked in the third quarter.