Industry news

Revenue growth is in decline for many telcos, and slowing for those in emerging markets, even though the economic downturn hasn’t resulted in the expected downward pressure on top lines, research has indicated.

A global consumer survey conducted recently by Ovum’s parent company Datamonitor revealed that over a quarter of consumers surveyed indicated that they either would, or consider cutting back on their telecoms spending, with a further 24 per cent undecided. When asked which services they would look to cut back on, over 30 per cent indicated that they would consider downsizing their mobile phone tariff, while 24 per cent saw fixed voice as an area where they could make cuts.

Ovum believes those that prudently managed their finances during the downturn will grow, but should be wary of initiating M&A programs designed solely to grow top-line revenues. Targeted mergers, acquisitions and partnerships that fill key skill-set gaps will be the flavour of telecoms going forward.

Ovum’s principal analyst Clare McCarthy said “While the recession accelerated revenue decline, challenges such as market saturation, increased competition and regulatory intervention on roaming and termination rates won’t disappear just because the economy picks up”.

PayPal has announced plans to extend the number of its employees in Asia Pacific to over 2,000 by the end of the year, with the creation of more than 100 new jobs at the company’s headquarters in Singapore.

The new vacancies will be across all seven of PayPal’s offices including, Australia, China, Hong Kong, India, Japan, Singapore and Taiwan.

The plans for growth can be seen as a direct result of the company’s 38 per cent growth since 2008, processing more than $6 billion of total payment volume within the Asia Pacific region in 2009.

Both PayPal and Singapore are excited about the company continuing and expanding its presence in Asia;

“We are excited that PayPal has chosen Singapore as the center from which to double its business in Asia. This is another example of how Singapore plans to stay at the forefront of technology and innovation,” said Mr. Leo Yip, chairman of the Singapore Economic Development Board (EDB) said.

An architectural group is waving the flag for outsourcing after announcing it has cut costs by 60 per cent since outsourcing its accountancy.

Red Box Design Group, based in Newcastle and Darlington moved its monthly accounting practice from an in-house financial director to an external chartered accountancy firm, it was reported in nebusiness.co.uk

It also managed to cut 50% of annual auditing costs thanks to the changeover.

Alan Smith OBE, managing director of Red Box Design Group told nebusiness.co.uk: “Cost control is more important than ever in this climate so to achieve 60 per cent savings on accountancy, such as cashflow, profit and loss and the balance sheet reporting, and another 50 per cent on the auditing, is pretty good going.”

Malaysia Airlines seals outsourcing deal with TATA Consultancy Services

Under the five-year agreement, Indian consultancy TATA will provide the Malaysian Airline with IT services.

In a statement, the company announced the partnership was part of its wider strategic IT outsourcing programme designed to transform the airline’s IT operations, in hope of delivering seamless internal customer experience.

“One of the key initiatives is fine-tuning our IT outsourcing strategy to deliver the required business results at lower cost,” said the airline’s chief information officer, Faridah Abdul Rahman.

Danish IT company, KMD, has signed a new four year offshore contract with Mahindra Satyam in a deal worth approximately $48 million.

The new agreement is an extension of a previous contract that was due to expire this year which involved the supply of application development, testing and application support services particularly in the area of SAP which is a growing business for the Danish IT company. Offshore work will be conducted in a development centre in Bangalore, India.

Lars Monrad-Gylling, CEO of KMD said: “We have chosen SAP as a strategic technological platform for our development work and consider it a common cornerstone to enable coherence between systems, global market standards and to offer our customers greater openness and freedom of choice.”

Virgin Atlantic, the transatlantic airline, has confirmed plans to open a new call centre this autumn creating more than 200 jobs.

The new centre will be based in Swansea, Wales, and will run in conjunction with the airline’s existing site in Crawley, West Sussex.

Julie Southern, Virgin Atlantic chief commercial and financial officer said: ‘Virgin Atlantic is pleased to be opening a new customer service centre based in Swansea, particularly at a time when few companies are announcing an expansion in job opportunities in the UK.

‘We know that Swansea has many experienced customer service staff and we look forward to being able to use their valuable experience to support Virgin Atlantic’s customers.’

The airline will start recruiting for the 200 later this month and hopes to fill them all over the next two years.

HM Revenue & Customs (HMRC), the UK’s tax authority, has signed an outsourcing agreement with Accenture to strengthen its in-house IT capability. The consultancy will develop a new IT strategy for the authority in an attempt to reduce costs.

Under the £10m agreement, Accenture will also make services available to other organisations involved in enforcing tax and customs laws, such as, the Revenue and Customs Prosecution Office, the Serious Organised Crime Agency, the UK Border Agency and the Home Office.

This deal marks an important step for HMRC in light of new powers granted to the Information Commissioner's Office allowing it to fine departments and companies in breach of data protection laws.

CIOs predict spending on staff in their datacentres will eclipse overall growth in IT expenditure this year, according to analysts IDC.

Despite the recession, large European organisations still expect staff spending to increase by ten per cent over the next year.

A core reason for the staff expenditure is that 25 per cent of organisations are still managing their servers and storage manually.

Giorgio Nebuloni, Research Analyst in IDC's Systems and Infrastructure group said: "CIOs are grappling with the consequences of virtualisation. While the benefits are clear, the impact on management is proving to be a challenge, new models for management will be needed to ensure that virtualisation continues to contribute positively to the datacentre."

Telco customer service levels are by far the worst in the UK, with just 30 per cent of consumers happy with the way complaints are resolved, research has indicated.

The survey undertaken by the Daily Mail’s Money Mail also found that 42 per cent of those questioned were unhappy with the service they received from their internet or phone providers over the last 12 months, it was reported on MyCustomer.com.

This figure compared with 46 per cent of banking customers and 49 per cent of shoppers who were satisfied with the way in which their problems were handled.

MoneyMail claimed that such issues were endemic across the industry, with small players being no better than large ones in customer service terms. As a result, it demanded "firm action by regulators" to fix the situation.

Is outsourcing the new religion? It seems there is no sector that the outsourcing industry will not touch. It was revealed this week that French nuns have been told that their holy bread may be replaced by cheaper Polish host. Apparently authorities are contemplating buying the cheaper wafers which are made by a secular workforce based in Poland.

However, the Lourdes church has since announced it would continue to buy wafers made in France – but only after negotiating a price reduction.

Not only has the Church given outsourcing its blessing this week but it seems public sector outsourcing has been given the thumbs up too. Capita boss, Paul Pindar, has joined a growing group of high-profile sourcing professionals calling for an increase in public sector outsourcing.

His comments were made following figures from the CBI last week that £130bn could be cut from public spending through increased outsourcing. It’s a no-brainer if you ask me.

Infosys Technologies also joined the pro-outsourcing band wagon this week. Not surprising but it’s interesting to hear that the Indian outsourcing provider is seeing its outsourcing deals pick up as major countries leave the economic downturn behind.

Currently, the company’s revenue distribution is 60 per cent from North America, 25 per cent from Europe and the balance from other parts of the world.

It’s not all been good news though. Research from the Daily Mail has indicated that telco customer service levels are in need of some serious improvement, with only 30 per cent of customers satisfied with the service they have received.

Looks like there is still work to be done in the sector to increase the number of happy customers.