More than half of telecoms companies (55 percent) plan to increase outsourcing in the next 12 months, according to research from Firstsource Solutions, a global BPO provider. Cutting costs is the main driver for telcos' outsourcing strategies, according to the research of 85 leading telecoms companies across the world.

Revenue pressure is driving decisions to outsource. The research showed that the recession has led to more than half of telecoms companies reporting lower customer spend, and over a quarter of telcos said that they have witnessed a rise in customers delaying payment of their bills.

Telcos are also experiencing increased customer churn due to the search for better deals from competitors.

Those telecoms companies surveyed that already outsource reported substantial cost savings: 67 percent said that they had cut their costs by of up to 40 percent through outsourcing, and nearly 20 percent reported cost savings of more than 40 percent.

Matthew Vallance, Firstsource's President Telecoms & Media and Financial Services, said: "Telecoms companies must continue to take cost out of their businesses, as we can expect consumers to take a cautious approach to spending for some time, in spite of evidence that the recession might be bottoming out. Outsourcing is a proven strategy for cutting cost directly and for transforming fixed costs into variable costs."

Although cutting costs will continue to be the main catalyst for outsourcing, telcos reported other important drivers, such as improving the quality of customer service, including through tapping into a larger pool of experienced customer management staff, and lengthening the customer service day. Telcos also want to reduce customer churn.

Vallance added: "Even in a recession, top quality customer services can help telcos retain their higher value customers and even encourage them to take additional services. Telecoms services are becoming more complex through the convergence of products and services. This requires outsourcers to have an in-depth understanding of the industry and the capabilities to provide the kinds of specialist customer services and support infrastructure that convergence demands. Outsourcing can also boost revenue, through reducing customer churn, encouraging customers to pay their bills on time, and by selling new products to them with a sales-through-service approach.

"These issues are driving telcos to consolidate their outsourcing suppliers to a handful of strategic partners. The demand is for outsourcers that have proven expertise, understanding of the sector and the ability to provide their clients with a global model, enabling provision of a comprehensive range of high quality services, flexible to scale up and down according to demand, and at lower cost than in-house."