The Two-Year Trend Toward Sweden In International Call
Center Site Selection
BY MAGNUS MOLITEUS, INVEST IN SWEDEN AGENCY
Sweden, with its strong industrial base and stable economy, is now recognized as a
northern European location of choice for expanding international teleservice agencies. In
the past two years, four premier U.S.-based call centers have independently chosen Sweden
as a base for their Scandinavian operations. Their collective decision provides strong
evidence of the favorable business climate and expansive market in the country, and is
confirmed by independent analysts such as U.K.-based Datamonitor.
These U.S.-based call centers have joined call centers from distinguished firms such as
DHL, the international air courier (which won the French Teleperformance Grand Prix award
for the best European call center of 1998); Teleperformance, one of the world's largest
telephone-marketing networks; and American Express.
The move to Sweden also provides evidence of the growing trend toward regionalization.
More and more companies are finding that one pan-European call center cannot service the
diverse cultures and languages in Europe. Instead, these companies now operate distinct
call centers for each of Europe's most important regions. Sweden, the focal point of
Scandinavia and its 24 million consumers, is a logical location for a northern European
Hewlett-Packard exemplifies the trend toward regionalization. The company recently signed
an agreement to move technical support for its series of hand-held computers to V�xj�,
Sweden. Previously managed from Amsterdam for the entire European market, technical backup
and end-user assistance has now been divided regionally with the Scandinavian center in
V�xj�. Hewlett-Packard is currently recruiting for the new center, which opened in
"Sweden offers high labor quality and low operating costs. It will be easy to find
well-educated and highly motivated call center agents," said Hewlett-Packard's
Scandinavian production manager, Jonas Lundeg�rd. The operation in V�xj� will be
handled by Nordic Support AB.
In September 1998, Cincinnati-based Convergys, a 30,000-employee call center service
agency formed from a merger of CBIS and MATRIXX Marketing, acquired Exit Marketing AB, a
provider of outsourced customer management in Sweden.
In August, Convergys established a call center operation in Linkoping, Sweden.
Convergys' decision followed a comprehensive site-selection process. The center has 35
seats plus management and back-office functions, and is expected to more than double in
size within a year. It is Convergys' fifth international call center (after Canada,
Britain, France and Belgium) and serves the Scandinavian market -- Norway, Sweden, Finland
and Denmark. It has the capability to access the Baltics as well, at the customer's
request. The Linkoping location, which provides inbound and outbound services, has already
secured a contract with Compaq and continues to negotiate with several other clients.
Keith Finnigan, who coordinated the call center project for Convergys, said, "The
multilingual population, high level of technological awareness and skilled labor force all
combine to make Linkoping an ideal site to serve the entire Scandinavian region."
Sykes Enterprises, Inc., an information technology and call center service agency based in
Tampa, Florida, expanded its current facility in Sveg in northern Sweden into a new
324-seat technical call support center -- servicing mostly international computer
manufacturers and software publishers.
In August, the Swedish Minister of Industry, Anders Sundstrom, inaugurated Sykes' call
center facility in Sveg. The seven-month construction period was funded by $2.75 million
in investments. The new, expanded facility serves as Sykes' Scandinavian headquarters.
John H. Sykes, president and CEO of Sykes, said, "We originally opened our center
in Sveg with 70 seats, but the region's constantly expanding technology has resulted in a
rapidly climbing demand for support."
Sykes' new center in Sweden includes the latest telephony, switching, servicing and
call monitoring software. It supplements 10 call centers in the United States and 10 other
SITEL Corporation, an Omaha, Nebraska-based telemarketing company which has served firms
such as Chrysler, IBM, Microsoft and General Motors, is continuing to expand its call
center in Sweden. Svanberg & Co., an Orebro-based telemarketer now known as SITEL
Nordic, was acquired by SITEL in July 1997. It is ideally suited for operations in Sweden
due to the geographic location, style of business management, technology and level of
customer service, according to Tony F. Mary, president of SITEL, Europe.
SITEL Nordic has doubled the number of its call center agents to more
than 200 persons. This expansion demonstrates the growing market for call centers in
Analysis Of Location Decisions
According to the U.K. market analyst firm, Datamonitor (see Call Center Outsourcing in
Europe, February 1998), Sweden will achieve a 150 percent growth rate in the call
center service agency market and a 64 percent increase in the total call center market
between 1997 and 2002. In addition, the proportion of outsourced operations will increase
relative to in-house. Service agencies will benefit since Sweden has the largest ratio of
Fortune 500 companies in the European Union, with firms such as Ericsson, Ikea and Volvo.
Datamonitor points out that Sweden is one of the three most developed markets in
Europe, where the trend toward outsourcing is particularly prevalent. Datamonitor's study
notes that technology and telecoms will drive call center growth in Sweden, "which
historically adopts technologies (such as the Internet) rapidly and on a large
scale." These fields require outsourced, technical help-desk operations.
Call centers are less expensive to operate in Sweden than in its major competitors.
Sweden's total hourly labor cost is 11 percent less than that of The Netherlands and
one-third less than the total cost in Germany. Office space in Stockholm costs less than
the European average. Interest rates are only five percent; inflation is below one
Finally, there is a favorable government climate to maintain Sweden's advantage. The
corporate tax rate, 28 percent, is among the lowest in the European Union. The
telecommunications industry was deregulated in 1993 (unlike almost all other European
countries). Telia, the country's largest telecommunications company, provides one of the
lowest phone costs in the world.
With more than 30 years of international experience in the pharmaceutical and
health care industries, Magnus Moliteus joined Invest in Sweden Agency (ISA), a government
organization that serves companies interested in locating in Sweden, in December 1995.
Previously, Moliteus served as president of Pharmacia U.S., Inc., a holding company for
Pharmacia's operations in the U.S. In his 30 years there, he helped establish Pharmacia's
subsidiary in Japan and incorporated Pharmacia's French company. Moliteus has served as
the chair of both the Swedish-American Chamber of Commerce and the international committee
for the Health Industry Manufactories Association (HIMA) in Washington, D.C.