AMERICA Online Inc., the world's biggest online service provider, is planning to expand its operations at the Clark special economic zone by transferring its support services in the United Kingdom, Australia and Hong Kong.

Trade Secretary Manuel Roxas II, who is currently on a US tour to attract information technology companies to the country, said in a report that AOL would build two more buildings in Clark and was in the process of moving its support services in the United Kingdom, Australia and Hong Kong.

AOL was among the first foreign firms to relocate their backroom operations in the country in 1998. It now has nearly 800 employees in its electronic customer support center, which links its subscribers to operators in an interactive chat.

AOL international vice president for planning and operations Mike Ritonia said AOL was keen on expanding its operations here because of its cost-effective and quality labor.

AOL saves 60 percent in labor costs by handling its mails here rather than in the United States. This is significant considering that labor accounts for 70 percent of the company's total operating cost.

While AOL does not use voice telephony for its customer support center, its Philippine operations have a low turnover rate of 10 percent compared to its US operations of 35 percent.

The Philippines is competing with India as the leading provider of clerical services to multinational corporations and high-technology firms keen on sub-contracting their backroom offices to save on overhead costs.

The Virginia-based AOL is the world's leader in interactive services, web brands, Internet technologies and e-commerce services.

It has two worldwide Internet services--America Online, with 22 million members, and Compuserve, with more than 2.7 million members. The company recently merged with the Time Warner group.

Apart from AOL, another American software services firm, Complete Business Solutions Inc., was keen on expanding its presence in the Philippines due to its large pool of English-speaking and skilled labor force.