U.S. PURCHASE MAKES ETELECARE LARGEST CALL CENTER IN ASIA
By Jose Villanueva
TODAY, June 2004

eTelecare International, which was spun off from listed SPI Technologies late last year, on Wednesday announced that it had acquired Arizona-based Phase 2 Solutions, creating the largest independent call-center company in Asia.

The combined entity operates nine call centers in Asia and the United States with an employee base of 5,500. Together, the companies generated revenues of about $75 million in 2003, which are projected to grow by 66 percent to $125 million by year-end, split “about evenly” between the two continents, according to an official statement.

The acquisition widens the business base of Los Angeles-based eTelecare, which provides technical support, customer service, and sales to Fortune 1000 clients in the technology, finance, and travel and leisure sectors. Privately-held Phase 2 Solutions is one of the fastest-growing call-center companies in the U.S., and a leading provider of outsourcing services to wireless and landline carriers.

“As a result of this combination, a Philippine company has emerged as a global leader in a sunrise industry where Filipinos have proven that we can be the best in the world,” eTelecare chairman Fred Ayala said.

“Offering the best of both worlds, the US and Asia, will give us a distinct advantage over local firms in the Philippines without a strong U.S. capability, and versus U.S. companies that do not have access to Asia's high-quality and cost-effective professionals,” Phase 2 president Larry Willet added.

eTelecare general manager for the Philippines Benedict Hernandez said the company's staffing levels are expected to increase both in Asia and the U.S. as a result of the merger, which would spur more rapid growth. Hernandez said eTelecare would continue hiring at its current rate of about 4,000 a year in the Philippines and will be opening its fourth call center in Cebu in the fourth quarter.

“We are combining our companies to provide our clients with an unparalleled range of cost and location options across a wider variety of industries,” eTelecare president for international operations Jim Franke said. “Our clients will now have the choice of onshore, offshore or a blend of the two; whichever solution or continent customers select, they'll get the same exceptional quality and superior value.”

The Department of Trade and Industry (DTI) and the Board of Investments, which have been strongly supporting the local call-center industry, estimate local employment in the industry has grown from virtually zero in 1999 to 40,000 today, for a growth of between 70 percent and 100 percent a year. The DTI is confident current employment levels would double to 80,000 by the end of this year, with more foreign companies choosing to set-up their business process outsourcing businesses here in the Philippines.

The Philippines has emerged as one of the top outsourcing centers in the world due to its high English proficiency, familiarity with Western culture, and high-quality telecommunications infrastructure. “We are able to deliver complex computer support and advanced financial advisory services because we hire the best and brightest in the Philippines. We hire from the country's leading universities and only accept the top 2 percent of applicants,” Franke cited.

eTelecare credited the company's ability to attract high performers to its attractive compensation, comprehensive leadership and career development programs, and fun, supportive environment. Over 300 entry-level agents have been promoted to managerial positions, with some promoted as many as seven times in just three years, which has helped account to a high employee satisfaction rate of 90 percent. “Our value proposition to our employees is that we will develop them into world-class customer service professionals,” Hernandez said.

eTelecare's high performance in the call-center industry has attracted investments from leading foreign private equity firms such as Crimson, AIG and Electra. It has also gotten support from A. Soriano Corp., the former controlling shareholder of parent company SPI.

“We have generated strong investor interest from both domestic and foreign investors because of eTelecare's market leadership position and strong revenue and profit growth, as well as investors' widespread appreciation that the Philippines is one of the fastest- growing and highest quality providers of call-center services in the world,” Ayala said.

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