AOL is close to selling its call center in India to Aegis, a business-process-outsourcing company of India's Essar Group, according to informed sources.

Aegis was one of several companies that bid to acquire the 1,000-staff call center in Bangalore. A formal announcement is expected next week.

An AOL spokesman did not confirm the proposed sale of the call center. Essar dismissed the report as speculative.

The Times of India reported Thursday that an announcement of the deal was likely Friday. By an agreement between AOL and Aegis, AOL will continue to give its call center business to Aegis for the next couple of years, the newspaper said.

Research firm Forrester has forecast that a number of Indian call-center and software-development subsidiaries of multinational companies will sell out, as it is now more cost-effective for foreign companies to outsource to a service provider than run their own operations.

However, AOL's decision to sell its Indian call center is linked to the company withdrawing from the Internet access business, instead emphasizing its Web-based business, as it needs less staff support, sources said.

The company has already sold some of its call center in other locations, including one in Albuquerque, N.M., to outsourcer Convergys.

The IDG News Service is a Network World affiliate.