CALL CENTERS-RP'S EMERGING SUNSHINE INDUSTRY

When a door closes, a window opens.

Even as the Philippines feels the fallout from the global IT crunch, it has benefited from the prevailing cost-cutting trend in an unexpected way-an unprecedented boom in the call in center business.

Indeed, the call center service has been dubbed the country's latest sunshine industry, with the sector expected to generate around 24,000 jobs in the next two years, according to the Department of Industry (DTI).

From 2000 to 2001,the segment reportedly grew by more than 200 percent, and local center revenues are projected to increase from $173 million in 2002 to $ 846 million in 2004.

Optimism runs high as an international research group forecasts the growth of ICT- enabled services to a $200-billion industry by the year 2010, with the call center segment's share at $42 billion.

Reports say that in the United States alone, there are 1.5 million call centers seats that could be outsourced, and so far the Philippines has less than 10,000 seats filled, indicating the domestic industry's huge potential.

What are call centers?

A call center in a central customer service operation where agents (often called customer care specialists or customer care representatives) handle telephone calls on behalf of a client. Clients include mail-order catalog houses, telemarketing companies, computer product help desks, banks, financial service and insurance groups, transportation and computer handling firms, hotels and IT companies.

The size of an operation is described in terms of the number of "seats." A seat consists of a station with two or three people alternating in several shifts to provide 24 hour call center service.  The industry's main target markets include the United States, Australia, and the United Kingdom.           

Many factors contribute to the local industry's sizzling development pace.  One is the rising cost of doing business in industrialized countries like the United States, forcing foreign companies to downsize and outsource peripheral e-services to developing countries like the Philippines to cut overheads.

Other reasons cited are better power and telecommunications infrastructure, competitive labor cost in terms of quality and value of money, and strong government support for ICT-related industries.

Of these, skilled labor is the country's acknowledge ace.  Filipinos are renowned for their English proficiency, high IT literacy, warmth, trainability and customer orientation.

"We're unbeatable when it comes to the way we speak English.  We're also more patient in handling calls and more customer-oriented," says an industry observer.

Major industry movers

Today, there are several industry players.  Among these are Etelecare International Inc., Infonxx, PeopleSupport, C3 Customer Contact Center Inc., Sykes Asia, Inc.,  Contact World, SVI Connect, Cquadrant and Immequire Philippines, Inc. Most are joint ventures with ICT conglomerates.

Even Easycall Communications Philippines Inc. has abandoned the paging business and is investing P1.46 billion over the next five years in a call center facility, Board of Investment records show.

And more foreign firms are expected to set up call centers in the country creating thousands of jobs for locals.

For its part, the government is bent on making the Philippines the call center hub of Asia, realizing the industry's tremendous capacity to provide jobs and earn dollar revenues.

In addition to offering tax incentives and heading trade missions, the DTI has proposed allowing telecommunications providers to build an information highway linking Metro Manila's cyberparks to fast-track the creation of an ICT corridor in the country.

The department has also identified call center services as one of five IT outsourcing areas for investment promotion and financing access.  A school curriculum conforming to the industry's requirements, with more emphasis on English, Math and Science, is also being pushed.

Competitive strategies

And even as the business thrives, the private sector already is calling for anticipatory measures to ensure it continues to prosper.  For one, they point to a need to continually expand and improve the labor pool.  At present, only top universities churn out graduates with excellent communication skills, raising fears of supply shortage.

Responding to this need, call center training schools are on the rise. The first of such specialized institutions, the Call Center Academy in Pasig City, started holding classes in 2002.  Through 20- to 40-hour modules, it equips both graduates and undergraduates with competitive and globalized customer service skills.

Industry officials also are batting for English as a medium of education in primary school to retain the country's language edge.  Infrastructure likewise needs beefing up, particularly in the area of more reliable circuitry to cut costs and make down time almost nonexistence.

Tough Rival

And no doubt all these efforts are necessary as other nations initiate moves to grab a share of a lucrative call center market.  At present, India leads the race with 100 centers and 300,000 agents against the Philippines' more than 20 call centers and less than 10,000 agents.

But China is poised to be a major threat as it has begun teaching high school students to speak in English.  Already, China has started to undercut competition in data encoding services, and five years from now, it will be a force to reckon with, warn observers.  Malaysia and Indonesia have also thrown their hats into the call center ring.

Indeed, the call center services is fast becoming the sector to watch out for.  But industry leaders caution that while the Philippines has a good change grabbing a big slice of the global call center pie, it will only attract investors if it continues to make the requisite improvements in infrastructure and labor quality.