Telco gets a warning

A lawyer from one of the leading telcos reportedly received a verbal reprimand from the National Telecommunications Commission (NTC) for supposedly underhand tactics in discrediting the application of digital trunk radio company Next Mobile Inc. (NMI) for authority to engage in 3G (third generation mobile communications technology) services.

Apparently, this telco brought up issues against NMI, such as alleged violation of foreign equity ownership rules, which have long been laid to rest. No less than the Department of Justice and the Securities and Exchange Commission have concluded that NMI is a Filipino company. The SEC has long abandoned the "grandfather rule" in determining whether a company is Filipino or foreign-owned. Under the new rule expressed under the Foreign Investments Act, so long as a company is 60-percent Filipino-owned, it is a Filipino company. NMI as ruled by these agencies is a 100-percent Filipino-owned company after the group of Mel Velarde bought out the shares of US company Nextel.

New multimillionaires

The booming business process outsourcing industry is creating dozens of new multimillionaires among Filipinos corporate officers of publicly listed multinational BPO providers.

Catanduanes Rep. Joseph Santiago reveals that Filipino senior executives and managers of upstart BPOs with major operations in the Philippines are enjoying the benefits of stock-based compensation by way of options to acquire company shares at discounted rates. This incentive is on top of their regular salaries and bonuses.

For instance, one Filipino executive is on record for recently selling 17,000 shares of PeopleSupport worth $177,650 (P9.8 million) at $10.45 per share, and for giving notice of his plan to sell another 17,000 shares. This is based on publicly available filings with the stock market regulators in the United States.

PeopleSupport is one of four relatively small but fast-growing BPO providers operating in the Philippines, and whose shares are publicly traded at the Nasdaq stock market in New York. The three others are Sykes Enterprises, ICT Group, and TeleTech Holdings. In the case of PeopleSupport, 100 percent of the firm’s outsourcing operations are based in the Philippines.

This just underscores the benefits of stock-based bonuses, according to Santiago, as he urged all publicly listed multinational BPOs operating in the country to extend their stock-based pay to rank-and-file customer service agents, instead of restricting the incentive to senior executives and managers. This way, they can lure young and bright employees and keep their unusually high attrition rates in check. PeopleSupport is already offering stock-based pay to rank-and-file Filipino workers.

A recent study by the global business consulting firm Frost and Sullivan expressed concern over the industry’s 25-percent customer service agent attrition rate. According to the study, since majority of agents in Philippine call centers are fresh graduates, pursuing higher education, better monetary incentives by other call centers and better career opportunities have been the key reasons for the high attrition rates.

Santiago says the stocks of BPO providers are among the hottest nowadays because the companies are growing revenues and profits at double-digit rates every year.

While calls centers, BPO providers, and medical transcription service centers luring professionals such as doctors into temporarily abandoning their fields for a higher paying job, outsourcing has become that one ray of light in the dark prospect of employment in this country. Call centers and BPOs have been giving the local real estate sector that much-needed push to rise from the doldrums. Unlike the dot.coms, these outsourcers are going to be here for a long, long time.

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