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Researcher bullish on Asian call centers

Frost & Sullivan expects revenue from call centers in the Asia-Pacific region to grow steadily despite the economy and the Sept. 11 aftermath.

By Anand Menon

SINGAPORE--The call center industry in the Asia-Pacific region will sustain growth over the next 5 years to 6 years despite the worsening economic climate and the aftermath of Sept. 11, which have both led to reduced spending among companies.

Market researcher Frost & Sullivan is bullish about the Asian call center market, and expects revenue from call centers in the region, including Japan, to increase to $1.5 billion in 2007, compared with $655 million last year.

Outsourcing call center functions will be one of the major segments to contribute to the market growth in the Asia-Pacific region, as companies look to realign labor-intensive activities, said Balaji Bhoovarahan, Frost & Sullivan Asia Pacific manager for consulting.

"The economic downturn and the terrorist attacks on the United States will see Asian outsourcing of call canters gaining more importance, as North American and European companies look to Asia as the best option for their call center services," he added.

Speaking at a call center forum Tuesday, Bhoovarahan noted that outsourcing of such facilities will be one of the biggest opportunities to flourish in selected markets, especially in India and the Philippines, with their skilled and English-speaking work force.

He said that 65 percent of call center agents served the outsourcing market in Australia, making it the largest in the region. A call center agent refers to a person who attends to service needs, including customer complaints over the telephone.

About 45 percent of the total call center functions in the region are outsourced, he said without elaborating.

Another reason for the projected growth in call centers in the Asia-Pacific region is tied to the adoption of voice-over-IP, which has reduced international call charges in call center activities, Bhoovarahan said.

He said that in terms of call center cost, 65 percent of expenses are on call center agents' salaries. "Asia is one of the cheapest places to acquire skilled, knowledge agents," he said. In addition, operational costs (like office space and telephone charges) are cheaper in Asia."

As for targeted sectors, he cited healthcare, manufacturing and hospitality as emerging industries for the call center business. China's hospitality sector, for instance, will see opportunities in the call center arena as the 2008 Olympics will be held there.

Looking ahead, Bhoovarahan said that despite the slow adoption of technology in Asia as compared with the United States and Europe, about 50 percent of Asian companies offering call center activities will have multimedia capabilities like chat and call-back functions.

Staff writer Anand Menon reported from Singapore.