Why the world answers your local phone call

Falling costs mean firms are siting 'call centres' wherever they choose - with strange results

At the end of a bad day at work, you get a parking ticket from a traffic warden in north London. You remonstrate. "I've put it in my computer," says the warden, smugly. "You'll have to ring that number on the ticket." It is a freephone number, so you ring and rant, but you get no joy from the polite Scottish woman who answers. She is trained not to get worked up. The air in Forres, in the Scottish Highlands, is conducive to good temper.

Back home, you cannot get your Hewlett Packard printer to work. You dial the help desk on a central London number, and are talked through the problem by a man with a slight foreign accent. This is not surprising. He is in Amsterdam.

Watching television, you see an advertisement for kitchenware from Lakeland Plastics and are persuaded to dial an 0800 number to get the catalogue; you are answered by a woman in Ogden, Utah.

THESE are clues to a phenomenon that is changing the world. Call it the abolition of distance. Due to the collapsing cost of telecommunications, proximity is becoming irrelevant to many activities. And just as phone calls can be passed around the globe, so can other activities.

Doctors in Washington DC dictate their memos down the phone and a few seconds later receive the typed version - from Bangalore. Bangalore is also an important supplier of computer programming to the West, and exports its wares down the phone line.

Film production companies in central London will soon be able to process rushes sent electronically from Hollywood - and have them ready for the producer to view with his breakfast in Los Angeles.

Only last week British Telecom said it was building telemarketing call centres in Doncaster and Newcastle, bringing 2,000 jobs to the North and millions of unwanted calls to phone subscribers everywhere.

It is difficult to overstate the significance of this phenomenon. It could mean economic salvation for parts of the third world, disaster for parts of the first world. It could change the way many of us work, and alter the relationship between town and country. It could even mean the Commonwealth becomes a more rational economic grouping than the European Union, because language is a more important tie than proximity. It will certainly mean simple geographic expressions such as national boundaries become less important.

Jean-Francois Rischard, vice-president of finance and private development at the World Bank, says: "In our view, low-cost telecommunications information technology is a major strategic factor of development from now on." It is strange, in the circum-stances, that the declarations of politicians on the subject are limited to mutterings about connecting schools to the Internet.

BETWEEN September and February, BT's charges to the United States were cut by 40 per cent, and those to Australia by a third. Fierce competition is the immediate driver, but the cuts would not be sustainable if technology did not allow them. Thanks to fibre optic cables and other sophisticated electronics, the capacity of the main trunk lines has increased much faster than the growth in voice traffic, and the cost per call has tumbled as a result. The cost of sending data - pictures and computer files - has also fallen: most people sending them across the Internet pay for no more than a local call.

According to the World Bank, the cost of a transatlantic voice call in 2000 will be 1 per cent of what it was in 1987, and by 2010 it will be three cents an hour - next to nothing. Protectionism is still keeping costs up in some areas - it costs more to phone Paris than New York from London - but everywhere the trend is downwards.

The Forres centre was set up by Cap Gemini UK (formerly known as Hoskyns). Costs, which cover labour and rental mainly, are 40 per cent lower than in London. The data fed into their handheld computers by traffic wardens from three London boroughs is sent north electronically, after which everything from angry phone calls to payment processing is handled in Forres.

Hewlett Packard has centralised all its European technical support in Amsterdam - the language skills of the Dutch being deemed to outweigh their comparatively high costs. Some "European" help desks are in America - whence the technology came, although Britain and particularly Ireland have more than their share. The help desk for America Online is in Dublin.

The Lakeland Plastics advertisement is the most intriguing example. In the US, 50 per cent of television advertisements carry phone numbers; in the UK only 19 per cent do, although the number is growing fast. The particular problem is coping with the huge surge of calls after a commercial is shown. Matrixx Marketing, "the world leader in providing outsourced telephone marketing solutions", can handle 190 calls simultaneously at its Newcastle call centre, but during a surge, AT&T automatically routes overflow calls to 1,300 more Matrixx operators in Colorado and Utah. They have been trained in the ways of the British by, among other things, watching Coronation Street tapes. "We were told not to be surprised by the accents," says Rolayne Pinnow in Ogden, Utah. "And we learnt what a flat was."

Newcastle staff are now being trained to handle US overflows and Don Anderson, managing director of Matrixx UK, says the company is looking at ways of spreading calls even further round the world. "The big issue is language," he says. That is why the group is considering a centre in the Far East to handle calls from the Asian community in the United States.

Airlines already use the overflow system. Ring British Airways at night and you may well talk to an American; ring in the US at night and you get a Brit. It will not be long before centres in the third time sector, Asia-Pacific, allow calls to follow the sun round the world. Listen out for Australians on the line.

Call centres are a boom industry. In the US 3 per cent of the labour force works in them - compared to 2 per cent in the motor industry. In Europe the figure is 0.5 per cent, but the consultant Datamonitor reckons this will more than double by 2001, and will provide jobs for 1.2m people. If Britain hangs on to its 45 per cent share, call centres will be a significant economic force of the next five years.

Call centres will certainly shift jobs from south to north and west; 10,000 have been created in central Scotland alone in the last five years, with plenty more in south Wales and northern England. Many handle enquiries that have been dealt with previously by office workers in the south-east. The received wisdom is that customers prefer Celtic or northern accents which is romantic but wrong. The attraction of the north and west lies in their low costs and plentiful labour.

Are call centres a force for good? Or for another round of stripping skills out of the labour force? A mix. Some call centres offer low-paid work, taking orders for example. But multilingual computer help desks will be repositories of great skill. Cap Gemini's Forres office is much more than a call centre, because it processes the parking tickets: in the jargon, the boroughs have "outsourced" to Forres.

Another set of skills will be needed by people hired to sell on the phone. What call centres will not do, however, is put people to work in their homes. A few years ago BT experimented with home-based directory enquiry operators but, a spokesman says, "it didn't prove cost-effective". Most experiments in teleworking have come to the same conclusion: that people with repetitive jobs work better in offices.

But voice telephony is only one part of the traffic that rushes around the international telephone network. Much more of it is data - documents, graphics, photographs, videos - all "digitised" or translated into the language of computers. Digital material can be exported or imported easily. So can the jobs that go with it.

EXPORTING office work started 25 years ago, when American insurance companies started sending claim forms to the Caribbean to be typed. First the forms went by ship, then by plane - now they are sent down the line. The leader in "remote data entry" is the Philippines, where in 1992 a data entry clerk was paid $4 to $6 for 10,000 keystrokes, compared with $65 in the US. It is big business in Europe too. The US insurance company Cigna gets its medical claims processed in Loughrea, Ireland.

Trouble is, no sooner has technology brought work to low-cost areas than it undermines them. Software that can "read" handwriting is becoming more sophisticated all the time, and in the longer run many forms that are now filled in by hand will arrive ready-typed across the Internet.

That is why some third world cities are already moving up-tech. Bangalore is brimming with small software companies. "It has a critical mass of people and organisations," says Colin Coulson-Thomas, a management specialist from Luton University. "The software people are as advanced as anyone anywhere." It is no surprise that Bangalore is picking up a mass of programming business from the West.

You do not have to be in the third world to follow the same path. Sohonet is a "high bandwidth" network that links Soho's specialist film production companies, transferring electronically digitalised film between the companies for viewing and editing. Sohonet is now testing a direct connection with Hollywood: rushes will cross the Atlantic at the speed of light - and, because London is working while LA is sleeping, producers will be able to see how the film is progressing day by day. "It gives us an opportunity to keep skilled people on our shores," says Ron Eagle, Sohonet's marketing director.

What does all this mean? According to the World Bank's Mr Rischard, "a sort of global highly competitive tele-economy will be born within a generation". Good news for the third world, and for those who have skills and like fighting their own corner. Not so good for others. "There will be a sort of rat race for competitiveness," he says.

Whatever, it will be a strange new world. Apparently, the World Bank has trailed the idea of security cameras in American shopping malls being monitored by people in Africa. Now that is one for politicians to chew on.