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Datacom sells Asian call centres in A$20M deal

05 Apr 13

New Zealand multi-national information technology company Datacom is selling its "mature" Asian call centre operations to a Cincinnati-based global operator, Convergys.

The $A20 million deal will see 1,000 Datacom employees in Malaysia and the Philippines join some 77,000 staff employed by Convergys globally.

The sale by tender had been hotly contested by major global players in the contact centre and business process outsourcing (BPO) sector, with Convergys recognising in particular the value of gaining some 15 Asian languages which its services do not currently offer.

There is no change to Datacom's Australian and New Zealand contact centres.

The company, which flies below the media radar but is one of the country's largest and longest-established builders and creators of IT systems, said it faced a choice between trying to take its Asian business to global scale with tens of thousands of employees or make a strategic decision to concentrate on its systems capability.

Owing to lower staff costs in Asia, the disposal would not have a material impact on Datacom's operating expenses, chief executive Jonathan Ladd told BusinessDesk.

The company's 2012/13 review shows total revenues in the 2012 financial year of $787.3 million, and "employees benefit expense" of $312.7 million.

Tax-paid profit for the year was $25.0 million.

Datacom opened its Asian operations in 1995.

"Our Asia BPO business had reached a tipping point and now requires a truly scaled global specialist to take the business to the next level," said Ladd in a statement.

"Datacom remains utterly committed to Asia and will now focus its regional investment on more technologically differentiated service businesses rather than to aggressively grow a global scale BPO business."

"This divestment of Asia based contact centres and renewed focus on our strategically poised Asia Systems business will serve to strengthen our capacity for expansion and acquisition investment in our other growth areas."

By Pattrick Smellie - BusinessDesk