By Victoria Ho
Tuesday, July 15 2008 07:01 PM
URL: http://www.zdnetasia.com/news/business/0,39044229,62043793,00.htm

Contact centers in Japan, India and Australia have seen the highest investments in the Asia-Pacific region as enterprises continued investing in contact center equipment and applications, according to Frost & Sullivan.

The latest report from the analyst firm showed the region's call center market earned revenues of US$665.4 million in 2007, and estimates this figure will grow by a 10.2 percent compound annual growth rate (CAGR) to hit US$13.1 billion by the end of 2014.

The report listed the top three markets in descending order: Japan, India and Australia, which accounted for 24.9 percent (US$165.5 million), 17.8 percent (US$118.6 million) and 15.3 percent (US$101.7 million) of the region, respectively.

While Frost & Sullivan predicted a 14.2 percent growth for the contact center applications market in 2008, it cautioned that the U.S. financial crisis might stumble this rosy forecast toward 2009 should the U.S. economy continue slipping, especially in the banking, financial services and insurance sectors.

The analyst firm said in a statement: "The current economic slump in the United States has not had a major impact on the Asia-Pacific contact centre applications market in 2007.

"Except for the Philippines where some deals were deferred, almost all other Asia-Pacific countries saw contact centers increasing their investments on equipment and applications to improve customer interaction services."

Frost & Sullivan industry manager Shivanu Shukla attributed the rise in investment to businesses placing greater emphasis on the role of contact centers.

Other factors contributing to growth include strong economic growth in the region driving new call center set-ups and expansion in some countries, the migration to IP (Internet Protocol) driving upgrades and replacements, and the offshoring of business from high-cost markets such as the United States and Europe, said Frost & Sullivan.

Additionally, Shukla said self-service contact centre applications will see greater adoption, fueled by businesses intending to keep labor overheads low.

The report said Malaysia gained stronger traction from demand from countries in the region, while China's upward momentum is attributed to its growing domestic contact center needs.

Storage vendor Hitachi Data Systems opened an Asia-Pacific contact center last year in Malaysia.

The contact center market is expected to be sliced up between China and India, with India serving the English-speaking market and China handling the bulk of the region including Japan, Korea, Taiwan and Hong Kong, according to call center vendor, Aspect software.

Aspect last year forecasted China to have a pool of call center agents matching India's size by 2010 to 2012, with this expected to grow and pose a threat to India's dominance of the English-speaking market as China's English-language capabilities grow, an Aspect executive told ZDNet Asia.