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275,000 jobs queue up for India, China

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CIOL Bureau
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CHICAGO: The global telecommunications industry will shift 275,000 jobs to such countries as India and China over the next four years in a move to cut costs and enhance services, according to a study released on Wednesday.



By the year 2008, global telecom operators will move 5 percent of their 5.5 million-person labor force to save $14.5 billion, improve the quality of call center capabilities and offer better higher-speed Internet and mobile data services, according to a study conducted by consulting firm Deloitte & Touche.



Shifting work overseas, a practice also known as offshoring, has been a hot topic of discussion in the United States as white-collar jobs are being eliminated as well as manufacturing jobs.



"For most companies, it's not a question of whether to offshore, but what functions to offshore, and how," Deloitte & Touche's deputy managing director, Phil Asmundson, said in a statement. "Additionally, operators with more experience are reviewing what operations they should offshore next.



"Offshoring 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 offshore," he added.



The push for lower costs, and better services and customer support is leading to the trend, Asmundson said. India is the current destination of choice, but countries such as China, Estonia and Argentina are coming online as well, Deloitte said.



The telecom sector lags other industries, such as high technology and financial services, in the practice of offshoring, Deloitte said.



Benefits to the practice cited in the survey include cost reduction of as much as 30 percent or more, enhanced high-speed Internet and wireless data services, and accelerated time to market for such services as multiple time zones allow teams to work around the clock, according to Deloitte.



Risks include increased complexity and loss of control that can lead to lower quality; language and cultural differences that can cause misunderstandings; resistance from internal employees, trade unions and anti-globalists, and security concerns in less stable countries, Deloitte said.



Deloitte said general rules of thumb include: be an early mover to shift work overseas, but not the first; choose the right partner as it can be expensive to unwind a bad selection; start small and build on what works; don't focus solely on cost cutting; and be ready to shift the work back home if the economic or political environment changes.



Top processes being shipped overseas include information technology services, call centers, accounting and finance, and operations and application service development, Deloitte said.



Deloitte surveyed 42 global telecom operators, representing all three major industry segments: fixed-line, wireless and cable.



© Reuters

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