New Zealand businesses are once again reconsidering offshore contact centre operations, drawn by the promise of lower labour costs. But those with long memories are watching with concern — because we’ve been here before, and we know how it ended.
The first wave of offshoring in New Zealand’s contact centre industry peaked in the early 2010s. Companies moved operations to the Philippines, India, and other markets with lower wage costs. The immediate financial benefits were real. But so were the consequences: frustrated customers who couldn’t understand agents, escalations that required expensive local staff to resolve, and brand damage that took years to repair.
Many of those companies eventually brought their contact centres back to New Zealand. Z Energy’s story is well documented — they returned their operations from the Philippines in 2010 and achieved significant cost reductions alongside dramatic improvements in customer satisfaction.
What’s Different Now?
The argument today is that AI changes the equation. Automated systems can handle simple queries, reducing the need for large numbers of human agents. With AI handling 30–40% of volume, the argument goes, offshore human agents handle only the complex calls — and the cost savings are too significant to ignore.
There’s merit to this argument. But it misses something important: the value of a locally-based team isn’t just about the calls they handle. It’s about the institutional knowledge, the cultural context, the ability to respond quickly to local events, and the relationship-driven partnership that comes from working with people who genuinely understand your business and your customers.
The AI Opportunity for Local Providers
Here’s what the offshoring advocates are missing: AI doesn’t just benefit offshore providers. Telnet has integrated its cloud-based platform with Amazon Connect, leveraging AI capabilities to separate simple from complex customer queries. This means we can offer competitive pricing while maintaining the quality, compliance, and cultural alignment that comes with a 100% New Zealand team.
The conclusion is simple: kiwis will always prefer queries to be solved by kiwis. AI makes that preference economically viable at scale. The companies considering offshoring today should look carefully at what local providers can now deliver before repeating the mistakes of the past.
