EoW July 2008

Hard times for Americans have opened up a new category of outsourcing, as Indian ❈ ❈ debt collection agencies in growing numbers are engaged by their US counterparts to follow up delinquent accounts. In the New York Times for 24 th April, Heather Timmons reported that, while perhaps only 5% of American debt collection is now done outside the country, the sector is growing, with India set to become the largest operating area. One US debt collection agency, half of whose 300-strong workforce is in India, pays its collectors there an average monthly base salary of $425, plus bonuses for getting laggard clients and customers to pay up. While debt collectors in the United States earn about $6,500 a month, even so the job is attractive in India where the average income is $63 a month. And the agency’s chief executive told Ms Timmons that the India-based collectors have an aptitude for persuasion. They are “very polite, very respectful, and they don’t raise their voices,” he said. “People respond to that.”

Telecom

Motorola hopes to stem its losses by segregating its lagging cellphone unit

Motorola Inc posted a steep first-quarter loss as sales in the company’s key handset unit fell 39%, extending a two-year slump. The Schaumburg, Illinois-based company – a once-strong rival to Finland’s Nokia and Samsung, of South Korea – said 24 th April that its cellphone division posted an operating loss of $418 million for the January-March quarter, compared with an operating loss of $233 million in the same period of 2007. The division shipped about 27 million handsets during first-quarter 2008, in the course of which its share of the global market fell to less than 10% – down from 22% last year. The mobile unit accounted for just 44% of total sales, compared with as much as two-thirds of Motorola’s revenue just a few years ago. In contrast, the company’s two other divisions presented a picture of health. Writing in the technology section of USA Today, Leslie Cauley recalled the glory days of Motorola, which for decades set an example of inspired innovation. Founded in 1928, it greatly enhanced its status in 1973 when Motorola designers and engineers produced the world’s first cellphone. The 28-ounce phone did not go on sale until 1984, but the company thereupon inaugurated “a global wireless revolution,” said Ms Cauley (“Motorola Plots Its Comeback as Cellphone Icon,” 24 th April). In an effort to restore its position, Motorola has announced plans to split itself into two publicly traded companies: one devoted to the handset business, the other to the profitable units that provide software, hardware, and broadband gear. Currently, each of the two business categories contributes about equally to Motorola’s $37 billion annual revenue. In other telecom news . . . A large percentage of US residents cannot obtain the access speeds typically ❈ ❈ available to Internet users in Japan, South Korea, and some European countries. But, according to Glenn Fleishman, of PC World, broadband speeds and availability are finally starting to accelerate in America, promising relief from “the heartbreak of slow-broadband paralysis.” He notes that AT&T, Verizon, Comcast, and other companies are rolling out 10 to 50 megabits-per-second service across the country, using fibre to the node (FTTX) and faster cable standards. Even as rates below 10 Mbps become more widely available, coverage areas for ❈ ❈ those services are expanding. Mr Fleishman’s home city of Seattle, in the Pacific Northwest, is finally seeing digital subscriber line rates that match or exceed cable service. He wrote, “Qwest is now rolling out 12 Mbps and 20 Mbps DSL in 23 of its markets. They’re the last major ILEC [incumbent local exchange carrier, formerly known as a Baby Bell] to create a real plan” for true high-speed broadband (“Faster Broadband! Thrill! Thrill!” 2 nd May)

Dorothy Fabian – USA Editor

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EuroWire – July 2008