PHILIPPINES--Local telecommunications company Bayan Telecommunications disclosed it is increasing its capital expenditure (capex) from 2 billion pesos (US$49.2 million) in 2007 to 2.5 billion pesos (US$61.5 million) this year.
During a year-end press conference last month, the company said it will also overhaul its business process outsourcing (BPO) operations, following the renaming of its Corporate and Marketing Unit to Bayan Business.
According to Tunde Fafunwa, Bayan Telecommunications' chief executive consultant, the company will use its 2008 capex for further expansion, particularly to boost its BPO services.
"One of our major targets for 2008 is to expand our presence in the country's BPO industry," Fafunwa said.
However, he said Bayan Telecommunications has no plans to set up its own BPO business, choosing instead to offer "enhanced services" for this sector.
The company's former Corporate and Marketing Unit previously offered basic services, such as bandwidth provision and infrastructure services.
Under the newly-named Bayan Business, the company said it will retain its "traditional" offerings and introduce more products and services, including new installation approach, tools for BPO firms and larger bandwidth packages.
According to Fafunwa, the Philippine carrier continues to see tremendous growth in the BPO industry.
Citing findings from a recent study commissioned by Bayan Telecommunications, he said the country's offshoring and outsourcing industry can have a major impact on the Philippine economy and provide much-needed jobs.
Fafunwa added that offshoring and outsourcing, which Bayan Telecommunications collectively calls "O&O", will also address concerns about falling human capital or brain drain.
"Brain drain is the biggest problem the country has in terms of human resources supply-demand mismatch, resulting in mass migration of skilled professionals to highly-developed economies, while causing social repercussions in its wake that goes beyond employment," he said.
Fafunwa said the Bayan study indicated that the country's O&O industry is the "plug that may stop the brain drain in the country", by providing job opportunities for more than 35 million Filipinos.
According to the survey, the industry is said to be capable of reversing the trend of mass migration to Metro Manila or other countries, by identifying opportunities in local urban centers. It found that by stimulating local growth, other aligned industries in the Philippine economic ecosystem would also be revitalized.
The Bayan Telecommunications study further determined that in 2007, an estimated 15 percent of the global O&O revenues worth US$1.067 trillion, were generated by the BPO and IT outsourcing (ITO) segments. Of this, the Philippines captured only 2 percent.
Ranked fourth out of a possible 40 global service destinations, the Philippines has already positioned itself as a customer-care and backoffice provider because of its conducive financial market, highly-skilled labor pool and availability of skills, Bayan Telecommunications said.
The study also indicated that in creative segments such as animation, games development and digital content, the country has had a long record of excellence and cost-efficiency that has the potential to grab a major share of the O&O market.
Joel D. Pinaroc is a freelance IT writer based in the Philippines.