Call centers to thrive amid downturn

The call center industry in Asia Pacific will sustain growth over the next 5 to 6 years despite the worsening economic climate and the aftermath of the terrorist attacks on US soil in September, which have both led to reduced spending among companies.

SINGAPORE--The call center industry in Asia Pacific will sustain growth over the next 5 to 6 years despite the worsening economic climate and the aftermath of the terrorist attacks on US soil in September, which have both led to reduced spending among companies.

Market research firm Frost & Sullivan is bullish about the Asian call center market, and expects revenues from call centers in the region, including Japan, to increase to US$1.5 billion in 2007 over US$655 million last year.

Outsourcing call center functions will be one of the major segments to contribute to the market growth in Asia Pacific, as companies look to realign labor intensive activities, said Frost &Sullivan Asia Pacific manager for consulting Balaji Bhoovarahan.

“The economic downturn and the terrorist attacks on the US will see Asian outsourcing of call canters gaining more importance, as North American and European companies look to Asia as the best option for their call center services,” he added.

Speaking at a call center forum today, Bhoovarahan noted that outsourcing of such facilities will be one of the biggest opportunities to flourish in selected markets, especially in India and the Philippines, with their skilled and English-speaking workforce.

He said that 65 percent of call center agents served the outsourcing market in Australia, making it the largest in the region.

A call center agent refers to a person who attends to service needs, including customer complaints over the telephone

About 45 percent of the total call center functions in the region are outsourced, he said without elaborating.

Another reason for the projected growth in call centers in Asia Pacific is due to the adoption of voice-over Internet protocol (VoIP) which has reduced international call charges in call center activities, Bhoovarahan explained.

He said that in terms of call center cost, 65 percent of expenses are on call center agents’ salaries. “Asia is one of the cheapest places to acquire skilled, knowledge agents,” he observed. In addition, operational costs (like office space and telephone charges) are cheaper in Asia.”

As for targeted sectors, he cited healthcare, manufacturing and hospitality as emerging industries for the call center business. China’s hospitality sector, for instance, will see opportunities in the call center arena as the 2008 Olympics will be held there.

Looking ahead, Bhoovarahan said that despite the slow adoption of technology in Asia as compared with the US and Europe, about 50 percent of Asian companies offering call center activities will have multimedia capabilities like chat and call-back functions.

Meanwhile, Frost & Sullivan awarded Genesys Telecommunications Laboratories Inc with its Market Engineering Award for the latter’s outstanding market performance in the computer telephony integration (CTI) software industry.

Genesys chalked up US$65 million in revenues in Asia Pacific (excluding Japan) last year and 42.9 percent market share, according to Frost & Sullivan’s Asia Pacific Call Center Hardware and Software Market Report.

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