Andrew Colley | August 26, 2008
PEOPLE Telecom has quietly moved to close its internal call centre as tough market conditions put pressure on operating margins.
Chief executive John Stanton said most of the carrier's customer care functions would be moved to Manila in the Philippines under an agreement with outsourced call centre provider Sonnet.
The company began transferring calls to Sonnet's northern Sydney operations four months ago, Mr Stanton said.
"We are outsourcing elements of customer care to reduce costs and improve customer service levels.
"Most of the customer care call function will be outsourced. We'll still have people internally to handle calls that the outsourcer can't deal with.
"We have been progressively moving calls to the outsourcer over time so the number of staff has come down compared with what it was six months' ago."
After the transition is completed next March, People Telecom's head count will be cut by 20 per cent from about 135 to 107.
Mr Stanton said the deal would save the company hundreds of thousands of dollars annually.
It is not clear whether more redundancies are planned, but Mr Stanton said the company would be keeping a close eye on its operating expenses, including staffing.
People Telecom is in the midst of a review to improve its cost structure as it struggles to improve returns to shareholders.
The company last week announced a net loss after tax of $617,000 for the year to June 2008, compared with a profit of $2.6 million for the previous year, which was assisted by the sale of one of its business divisions.
The telco's operating profit improved marginally from a loss of $660,000 in 2007 to a loss of $617,000 for the year to June 2008.
It narrowed its earnings before interest, tax, depreciation and amortisation loss of about $900,000 in 2007 to $574,000 for the year to June 2008.
Mr Stanton said the company had renegotiated its network wholesale agreements and closed some of its less profitable business lines and partnerships. "We count every penny in our space and in this industry you obviously have to," he said.
Yesterday, the company announced an agreement to resell Vodafone's mobile service under a virtual network operator agreement.
Last week it revealed plans to resell services from all Australia's major carriers except Hutchison 3, suggesting that a network agreement with Optus was expected soon.
Mr Stanton said Telstra was yet to commit to offering its Next G network under wholesale arrangements.
"I would like to sell that network but we have no commitment from Telstra at this stage that it will be wholesaling it," he said.