Survey: 275,000 telecom jobs to go offshore by 2008

The move toward offshore outsourcing could save telecoms $14B annually

By Scarlet Pruitt

March 24, 2004 12:00 PM ET

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IDG News Service - Telecommunications operators could be the next group to take advantage of the cost savings and enhanced services made possible by moving operations overseas, according to a new survey conducted by Deloitte Research.
Global operators are expected to move 5% of the industry's 5.5 million jobs, or 275,000 positions, offshore by 2008, the professional services and advice organization said today.
What's more, the industry is expected to reap cost savings of $14 billion a year by 2008 from improved call center capabilities and enhanced broadband and mobile data services, according to the research company.
Offshoring -- when companies move jobs and sometimes operations from their home countries to locations where labor 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 realize cost savings of 20% to 30% 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, Deloitte said.
Call centers, IT services and application service development and accounting and finance operations will be among the top offshore processes, the research firm said, adding that places like India, Argentina and Estonia will be destinations of choice.
However, offshoring isn't an entirely rosy scenario, Deloitte warned. Companies could face obstacles that arise as a result of the complexity of operations, loss of control, language and cultural barriers and objections from groups that don't want to see domestic jobs move overseas.
Deloitte recommended that companies engaging in the practice 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 derived its findings from a December 2003 survey of 42 operators in the fixed, mobile and cable segments.

Reprinted with permission from

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Story copyright 2009 International Data Group. All rights reserved.

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