Energy Failures Create Uncertain Future For Call Centres

Craig Liddell

Updated · Jul 13, 2001

“Call centres are withdrawing from regional Australia because power supply is well below the standards that are available in the metropolitan areas,” according to new research by telecommunications analyst Paul Budde.

Call centres were seen as a godsend to regional Australia, he explains, with telecommunications making them less distance-dependent. At that stage, nobody really questioned the electricity supply. However, in contrast to telecommunications, the quality of the electricity supply is deteriorating and this has forced several regional call centres to relocate in the metropolitan areas.

“Electricity supply downtimes often stretch over many hours,” Budde says, using his own personal experience of Bucketty, around 95 kms from Sydney. “Over the last six months alone we have been without electricity for several days. The outages have ranged from several hours to half-days and one full day. In comparison, our ISDN line has failed perhaps twice, for a few minutes only, during the last three years and during that period the telephone system has only been completely down once, during a thunderstorm.”

Budde says the reasons given for the outages varied from a mailed notice of scheduled maintenance, the connection of new customers in the area, for which it is apparently necessary to cut the power supply of the whole district. “And, of course, there are the regular thunderstorms and the occasional car hitting a power pole.”

He believes that while some outages are classified as being out of the control of the utility, the utilities should have systems in place to enable them to continued power supply in the event of unforeseen circumstances.

“According to local electricians one of the reasons is lack of investment in the infrastructure. Equipment in the network is sometimes very old and the maintenance is not keeping pace with the increase in population in the area. For example, we have no cross linkages between the grids of the Hunter Valley and the Central Coast in this area, so there is no alternative option. And, while the situation in NSW is reaching alarming proportions, in Victoria it is worse.”

Budde questions, “what will happen when further privatisation takes place? We are going down the same road as the USA and New Zealand, where privatisation of the utilities has led to ongoing economic and social losses. There was a lesson for Australia in this, but it seems that it has been ignored and we are falling into the same trap.”

Budde places the blame firmly with the regulators, which number as many as 11, as identified by the Electricity Supply Association of Australia. He believes the sector is heavily over-regulated.

“So called “incentive regulation” in NSW places only one driver on NSW distributors, which is to lower costs (through reduced opex and capex). There is no incentive to improve reliability – in fact the reverse is true.”

In the current circumstances, EnergyAustralia is saying that they are being forced to consider curtailing system augmentation in populated parts of their network because they simply can no longer afford it. There is simply no way they can afford to invest in places such as Bucketty, even if it were prudent.

Budde denies the lure of cheap Indian contractors providing call centre services is another contributing factor in the movement of call centres out of regional areas.

“This is not the reason for the current down turn [as] very few Australian companies are using services in India at the moment.”

By 2003, India will have one million call centre operators, according to research by consulting firm McKinsey & Co.

He expects a strong trend toward Australian companies outsourcing their call centre operations overseas, yet this is not happening at the moment. When it does, it will begin at the multinational level, he says.

Multinationals from outside Australia, mainly from the United States and the United Kingdom, will lead this trend, be believes, but Australian companies are more reluctant. In fact, many bigger names such as GE Capital, Harrods, American Express and Citibank have call centre operations in India.

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