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Forget India; Call Centers Boom in Caribbean

US Companies Flock to the Caribbean for Low-Cost, 'Nearshore' Services

Kate Rogolt, left, manager of the KM2 call-center firm, supervises Melissa Babb who takes calls fromcustomers in their office in Bridgetown, Barbados, Friday, Aug. 31, 2007. Plunging communication costs,workers who relate easily to American customers and the region's famed hospitality are attracting Americancorporations, boosting the work force in the "nearshore" service industry in the Caribbean. (APPhoto/PhotoDisc)

The Associated PressBy MICHAEL MELIAAssociated Press Writer

SAN JUAN, Puerto Rico Sep 7, 2007 (AP)

In a global search for low-cost customer service, AOL considered call centers in India and other

hotspots then settled on the tiny island of St. Lucia.

In choosing the Caribbean island, AOL a unit of Time Warner Inc. joined other U.S. companies that

have made the region a new global hub for call centers.

Plunging communication costs, workers who relate easily to American customers and the region's

famed hospitality are attracting American corporations, boosting the work force in the "nearshore"

service industry in the Caribbean.

Jamaica is one of the leaders with about 14,000 employees in the sector. In the Dominican Republic,

18,000 agents, many of them bilingual, are handling calls in English and Spanish. Call centers

dedicated to customer service have also opened in Barbados, Trinidad, and Dominica.

"The islands all seem to be really positive as opposed to the surly attitudes you have in some of the

other places. It's cheery weather, it's cheery people," Robert Goodwin, the AOL manager who chose a

call center in St. Lucia, said from his company's headquarters in Dulles, Va.

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AOL still uses call centers in India and elsewhere for technical support and other services taking

advantage of that country's large numbers of workers with technical and advanced degrees.

But the Caribbean is becoming increasingly competitive in the call center industry, with island

governments offering tax and other incentives to lure companies to their shores. Jamaica, for

example, granted call centers "free zone" status that allows owners to repatriate 100 percent of their

earnings tax-free.

The Caribbean has taken only a tiny share of the market from still-hot India and the Philippines, but

the impact is huge on islands with tiny populations, said Philip Cohen, an industry consultant based in

Sweden.

In Montego Bay, a resort area on Jamaica's north coast that accounts for about half the island's call

center jobs, developers have rapidly built thousands of concrete, single-family homes to accommodate

the workers.

"You put a call center with 100 people in Barbados and that's a God's gift. With 100 people in India,

you can't even see it," he said.

The industry owes much of its success to a telecommunications liberalization that began sweeping

former British colonies in the Caribbean about six years ago. As new suppliers have challenged the

monopoly of Britain-based Cable & Wireless PLC, lower prices allowed the region to compete.

The collections and call-center firm KM2, which holds the AOL contract in St. Lucia, has opened a site

in Barbados and owner David Kreiss said he is looking to expand again as new telecoms install fiber

optic cable.

"Whichever island they go to we follow," Kreiss said from his office in Atlanta.

The number of people working at Caribbean call centers has increased from 11,300 in 2002 to a

current total of 55,000, with an annual economic impact of $2.5 billion (1.83 billion euros), according

to Philip Peters, chief executive of Coral Gables, Florida-based Zagada Markets.

Peters, whose company surveys the call center industry in regions around the world, said the

Caribbean has set itself apart with high service, a quality he attributes to cultural similarities and the

influence of the tourism industry.

"They have a history of troubleshooting with Americans without getting upset," he said.

Large American companies including Verizon, AT&T, Delta Air Lines, AIG and Nortel have used

Caribbean call centers, while often keeping operations in Asia or elsewhere in case of a hurricane or

other disaster, Peters said.

While much of the profits go to U.S.-owned operators, the islands welcome the business to diversify

their economies and counter high unemployment.

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In Jamaica, where the vast majority of 18 call centers are owned by people outside the island, the

starting wage is $2.75 (2.01 euros) to $3.20 (2.34 euros) an hour, according to Christopher McNair of

Jamaica's investment promotion agency. "In Jamaica it's quite an attractive salary," he said.

In Puerto Rico, a U.S. territory subject to the federal minimum wage of $5.85 (4.28 euros) an hour,

about 4,000 people work in call centers.

One leading advocate is Dominican President Leonel Fernandez, who said call centers are key to

transforming his nation from a low-end assembly center to a knowledge-based economy.

"I see the digital economy as the best opportunity we in the Dominican Republic have ever had of

leapfrogging to a new level of economic development," Fernandez told a business conference recently.

Many of the jobs involve simple, repetitive tasks, such as handling phone orders but governments

describe the goal as gradually evolving to offer more demanding, expensive services such as technical

support.

One Jamaican company, e-Services Group, began as a data entry operation but now also provides a

range of support including help building Web sites and processing insurance claims.

"We've started with customer service, and as we proved we could do more, they've started driving

more business in," said Patrick Casserly, the chief executive officer.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published,

broadcast, rewritten, or redistributed.