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

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 new survey conducted by Deloitte Research.

Global operators are expected to "off-shore" 5% of the industry's 5.5 million-strong labor force, or 275,000 jobs, by 2008, the professional services and advice organization said Wednesday.

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, the researcher said.

So-called '"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 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, Deloitte predicted.

Call centers, IT services, application service development and accounting and finance will be among some of the top offshore processes, the researcher said, adding that places like India, Argentina and Estonia will be destinations of choice.

However, off-shoring isn't entirely rosy, the researcher warned, 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 derived its research from a survey of 42 operators in the fixed, mobile and cable segments completed in December 2003.

Copyright © 2004 IDG Communications, Inc.

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