275,000 telecom jobs offshore by 2008, says study

Telecommunications operators will be the next group to benefit from the cost savings and enhanced services made possible by...

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

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