Outlook Brightens for Teleservices

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WASHINGTON -- After years of consolidation and contraction, the teleservices industry's financial future looks more upbeat, Brandon Dobell, senior research analyst for Credit Suisse First Boston, told members of the American Teleservices Association yesterday.

The economy is slowly improving, and teleservices companies are getting better at managing growth, said Dobell, who spoke at the annual ATA Washington summit here.

"The near term looks good for stocks," he said. "Investors don't have too much built up in terms of expectations."

The industry got into trouble in the mid-1990s when it grew too fast, Dobell said. Investors remember the period following the market's peak in 2000 when teleservices companies tumbled due to overcapacity.

Major teleservices providers like West and Convergys are diversified and learned to be more efficient during the lean years, he said. Offshoring has affected domestic call center providers, but the worst may be over.

Nevertheless, industry-related issues remain and stocks have been volatile in the past year, Dobell said. Investors will continue to watch the effect of offshoring and the economy.

Investors worry about the ability of service companies to differentiate themselves, he said. Many companies in the service industry do the same things, so investors will look to companies that stand out from the crowd.

Scott Hovanyetz covers telemarketing, production and printing and direct response TV marketing for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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