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U.K Call Center Revenue to Decline over the Next Five Years, says IBISWorld

January 30, 2013

 

The crisis affecting the call center industry in the U.K is likely to continue for the coming five years. U.K call center industry revenue will decline marginally over the coming five years to 2017-18, says a new report from IBISWorld.

The industry was performing extremely well until 2009-10 with consistent double-digit revenue growth. Encouraged by this growth, many new companies entered the market. However, the economic downturn that swept the entire world dramatically changed the operating demand.


As an immediate outcome of economic downturn, industry demand collapsed, causing revenue to spiral downward.

Considering the highs and lows the industry experienced over the past five years, IBISWorld estimates the industry will have an average revenue growth of 1 percent per annum. The 520 industry operators are expected to generate $3.54 billion in 2012-13.

The industry survived over the last five years mainly due the demand from corporate sector for increased customer care. Despite this demand, profitability suffered as a result of growing competition from offshore contact centers in developing countries like India which deliver the service for significantly lower costs.

The outsourcing trend significantly weakened the demand for onshore call centers and affected their profitability. The industry margin bottomed out in 2009-10, when profitability averaged just 1.8 percent of revenue. During 2012-13, profitability strengthened to stand at about 3.1 percent of total revenue. Revenue is expected to fall by 1.1 percent over 2012-13.

Research also forecasts significant industry consolidation in 2012-13. Enterprises will seek to merge establishments into fewer larger centers and increase the use of automation in preference of labor in order to reduce operational costs.

Call center value is progressively shifted to more automated processes like auto attendant and call recording, online platforms, or even to social networking sites. This industry is dominated by in-house contact centers. Outsourcing operations to contact center specialists is a growing trend, but outsourced specialists still account for just 30 percent of industry revenue, giving the industry a low level of market share concentration.

Top performers in the call center industry in the U.K include MM Teleperformance (News - Alert), Sitel UK, LBM Direct Marketing and Convergys CMG U.K. 

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Edited by Braden Becker

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