Operators to Off-shore 275,000 Positions by 2008"

A new survey of 42 global telecommunications operators representing all three major industry segments -- fixed, mobile and cable -- found that global telecommunications operators are increasingly using off-shoring as a strategy to decrease operational costs and enhance services, according to the Global Technology, Media and Telecommunications Industry Group of Deloitte Touche Tohmatsu.

Conducted by Deloitte Research, the survey shows that by the year 2008, five percent of the industry's 5.5-million labor force, or 275,000 positions, will be off-shored in the communications industry. The industry lags other sectors such as high technology and financial services, but the practice is fast becoming one of the industry's most significant business trends. Of the operators surveyed who are either off-shoring or have definite plans to off-shore, benefits cited included: cost reduction of 20% - 30% by 2008; enhanced quality of staff supporting more technically advanced broadband and wireless data services; and accelerated time-to-market for advanced data services and applications.

"Off-shoring can be one of an operator's most complex business decisions. For most companies, it's not a question of whether to off-shore, but what functions to off-shore, and how. Additionally, operators with more experience are reviewing what operations they should off-shore next," said Phil Asmundson, deputy managing director of Deloitte & Touche's Technology, Media and Telecommunications in the U.S. "The drive for enhanced data services, better customer support and faster time-to-market for innovative applications and services, as well as the perennial drive for profitability, means that many operators consider off-shoring a necessary strategy for growth."

"There are a variety of options available to operators. Off-shoring should not be not considered a panacea for all ills. In some cases, it may be more efficient to fix a process, such as billing, rather than off-shore," said Asmundson. "No matter what strategy an operator chooses, off-shoring is a complex business decision that must require careful analysis to understand the relevant business risks, benefits and opportunities."

Completed in December 2003, the Deloitte Research communications off-shoring study surveyed 42 of the world's leading communications operators, representing all three major segments: fixed, mobile and cable. The sample included 10 of the world's top 20 operators on a revenue basis and the survey sample represents approximately 30% of total industry revenues - based on 2002 results. The survey looked at the industry's current activities and future expectations for off-shoring. Companies responding to the survey either own their own off-shore facilities; have established a joint venture, or are outsourcing today.

You can read the report here - http://www.deloitte.com/dtt/cda/doc/content/Deloitte Research_Offshoring Call_Mar2004.pdf"

Posted to the site on 25th March 2004