In a global search for low-cost customer service, AOL considered call centers in India and other hotspots, then settled on tiny St. Lucia. In doing so, AOL, a unit of Time Warner Inc., joined other US companies that have made the region a new global hub for call centers. Plunging communication costs, workers who relate easily to US customers and the region's famed hospitality are attracting US corporations, boosting the work force in the "nearshore" service industry in the Caribbean, reports AP (Sept. 6, 2007):

Jamaica is among the leaders with about 14,000 employees in the sector. In the Dominican Republic, 18,000 agents, many bilingual, handle calls in English and Spanish. Call centers dedicated to customer service have also opened in Barbados, Trinidad, and Dominica. "It's cheery weather, it's cheery people," Robert Goodwin, the AOL manager who chose a call center in St. Lucia, said from his company's headquarters in Dulles, Va;

AOL still uses call centers in India and elsewhere for technical support and other services, taking advantage of the many workers with technical and advanced degrees. But the Caribbean is becoming increasingly competitive, with island governments offering tax and other incentives. Jamaica, for example, granted call centers "free zone" status that allows owners to repatriate 100% of their earnings tax-free;

The Caribbean has taken only a small share of the market from still-hot India and the Philippines, but the impact is huge on islands with tiny populations, said Philip Cohen, an industry consultant based in Sweden. Jamaica's Montego Bay accounts for about half the island's call center jobs, and developers have built thousands of concrete, single-family homes to accommodate the workers;

The industry owes much of its success to a telecom liberalization that began sweeping former British Caribbean colonies about six years ago. As new suppliers challenged the monopoly of UK-based Cable &Wireless PLC, lower prices allowed the region to compete. Collections and call-center firm KM2, which holds the AOL contract in St. Lucia, has opened a site in Barbados and Atlanta-based owner David Kreiss said he is looking to expand again as new telecoms install fiber optic cable;

The number of people working at Caribbean call centers has increased from 11,300 in 2002 to a current 55,000, with an annual economic impact of US$2.5 billion, says Philip Peters, CEO Coral Gables, Fla-based Zagada Markets, which surveys the call center industry worldwide. He adds that the Caribbean has set itself apart with high service, a quality he attributes to cultural similarities and the influence of the tourism industry. Large US companies including Verizon, AT&T, Delta Air Lines, AIG and Nortel have used Caribbean call centers, while often keeping operations in Asia or elsewhere in case of a hurricane or other disaster, Peters said;

In Jamaica, where the vast majority of 18 call centers are owned by people outside the island, the starting wage is US$2.75 to US$3.20 an hour, said Christopher McNair of Jamaica's investment promotion agency. "In Jamaica it's quite an attractive salary," he said. In Puerto Rico, a US territory subject to the federal minimum wage of US$5.85 an hour, about 4,000 people work in call centers;

Dominican President Leonel Fernandez said call centers can help transform his nation from a low-end assembly center to a knowledge-based economy. One Jamaican company, e-Services Group, began with data entry but now provides support including help building Web sites and processing insurance claims. "We've started with customer service, and as we proved we could do more, they've started driving more business in," said CEO Patrick Casserly.