Telecommunications operators will be the next group to
benefit from the cost savings and enhanced services made possible
by moving operations overseas, according to a survey conducted by
Deloitte Research.
Global operators are expected to "offshore" 5% of the industry's
5.5 million-strong labour force, or 275,000 jobs, by 2008.
The industry is expected to reap cost savings of $14bn a year by
2008 from improved call centre capabilities and enhanced broadband
and mobile data services.
So-called '"offshoring" - when companies move jobs and sometimes
operations from their home countries to locations where labour and
business costs are cheaper - has become common in the high tech and
financial services industries.
Telecommunications companies are now poised to take advantage of
the trend, Deloitte said, adding that early adopters could gain a
20% to 30% cost savings by 2008.
The industry's move toward data services will also fuel the
trend, making it even more imperative that companies have
affordable and technically skilled support staff.
Call centres, IT services, application service development and
accounting and finance will be among some of the top offshore
processes, Deloitte said, adding that places such as India,
Argentina and Estonia will be destinations of choice.
However, offshoring is not entirely rosy as operation
complexity, loss of control, language, cultural barriers and
objections from home country groups that do not want to see local
jobs go overseas present obstacles.
Deloitte recommended that companies engaging in the practice
should start small, set realistic expectations, develop offshore
expertise, find the right partner in a host country and be ready to
move operations back home if the business, economic or political
climate in the host country changes.
Deloitte surveyed 42 operators in the fixed, mobile and cable
segments completed in December 2003.
Scarlet Pruitt writes for IDG News Service