India put on hold as Africa challenges to be the latest outsourcing hotspot
Could Africa be the next India? British consumers could be as likely to find themselves talking to Cairo as Calcutta by 2010 as Africa continues to grow as a global outsourcing centre, experts claim.
Africa will see the fastest growth in the number of call centre workers of any region between now and the end of the decade, according to the market analysis firm Datamonitor.
It expects rapid growth in Western investment in the region after a determined effort by governments and private sector companies to make Africa an outsourcing hotspot.
In a speech today, Datamonitor's Peter Ryan - its call centre and outsourcing analyst - will say African countries generally compete on lower prices than Western Europe and North America and not far above those in India.
"They provide excellent language capabilities and agent sophistication and are on a par with most other popular outsourcing destinations," he will tell an audience in Cairo.
Egypt, in particular, impresses Western investors with a mix of "savvy and linguistically talented agents", low costs and the attraction of joining Western companies that already have customer centres there.
The consultants AT Kearney recently ranked Egypt No 12 in a list of top offshore outsourcing destinations. It produces 200,000 graduates a year, of whom 80,000 emerge with IT and engineering degrees.
Datamonitor forecasts the Egyptian call centre industry will expand more than fourfold from 1,500 seats last year to 7,000 by 2010.
Mr Ryan also identifies Botswana, Ghana and Kenya, all formerly part of the British Empire, as growth markets for the English-speaking market. It forecasts Botswana will grow from a small base of 100 call centre seats at present to 500 by 2009.
"While not traditionally a location of choice for serving western customers, sub-Saharan Africa has emerged as a niche market for Western customer services," he will tell the offshore customer management international conference.
"Botswana, Ghana and Kenya have made headlines with their proactive moves to put themselves on to the business process outsourcing map," he said.
Morocco and Tunisia have been successful in attracting Francophone business from French companies, who have fewer options than their English-speaking rivals. South Africa remains the dominant market in Africa, Mr Ryan said.
Ri Pierce-Grove, a technology analyst at Datamonitor, said: "We may see prevailing stereotypes of African countries as universally unstable, corrupt, and technologically limited replaced with a more nuanced, country-specific view."
The upbeat forecasts raise the question as to whether Africa can be the new India. The subcontinent's outsourcing industry, which has seen meteoric growth this century, had appeared to have hit a bump in the road recently. Abbey, the high street bank, shut its call centres in India last year because of customers' reported unhappiness with the services provided by 1,000 staff in Bangalore.
Last year a study by ION Group, a consultancy, found South Africa had pushed India into second place in terms of call-handling quality, technological infrastructure and linguistic capabilities.
But India is still the dominant player in the world. Figures from India's National Association of Software Companies show exports of outsourced services surged 33 per cent in the year to March to $23.6bn (£12.8bn). The management consultancy McKinsey forecasts it will grow 25 per cent a year to $60bn by 2010.
NelsonHall, an analysts firm, said it was still sceptical that Africa would make substantial in-roads into the global market.
"We're always interested in what is going on but outside South Africa there are not an awful lot of call centres," a spokesman said.
Nigel Roxborough, the director of research at the UK's National Outsourcing Association, said there was an opportunity for Africa to compete for outsourcing work. "But it is much more of a niche market than India or China. The significant difference is the education output of graduates in places like India," he said.
He said countries such as Botswana, Ghana and Kenya would seize work as long as their governments made the necessary investment in education and IT. He also said mobile technology has enabled African countries to gain fast access to telecoms. Last year a report commissioned by Vodafone found evidence that a mobile telecoms system encouraged foreign investment.
Mr Roxborough said India was unlikely to be worried about the threat from Africa compared with China and Eastern Europe. "Indian companies have taken up the challenge by going into countries that might represent future competition," he said.
Either way, he said there was a positive international development message as growth of outsourcing led to large amounts of investment and trade for countries that had moved into that market.
Egypt builds its hopes in the shadow of the pyramids
By Susie Mesure
On the road to Alexandria, 10km from the Great Pyramid of Giza, is Egypt's answer to Bangalore. A gleaming new business park, a novelty in the sprawling city of overcrowded tower blocks, contains the hopes of a Prime Minister desperate to put Cairo on the global technology map.
One way to achieve this is to steal India's call centre crown, by offering multinationals a viable alternative when they are looking to outsource customer service departments. Xceed, Egypt's biggest call centre, was an early tenant in Smart Village, the conurbation that Ahmed Nazif hopes will turn the country into the regional hub for IT and communications.
Egypt sees itself as a strong competitor to India because of its big pool of multilingual graduates desperate for work. The government has incentives aimed at boosting its burgeoning call centre industry and even sponsors a "virtual" call centre university.
Alaa el Shafei, the vice president of Xceed, said: "Call centre jobs are very well perceived in the Egyptian market so we can grasp the attention of fresh graduates to work here."
Even repetitive call-centre jobs are held in esteem when the country's unemployment rate is 10 per cent.
Xceed is pulling in names such as Microsoft, which routes its European calls through the centre. Bill Gates even features on Xceed's promotional video. GM and Oracle have also outsourced chunks of business to Xceed.
On its second floor, fluttering flags demarcate the notional boundaries of each different country's callers. The questions, when I visit, are about Microsoft's latest software package. Xceed's rotating staff of 1,700 work in shifts round the clock, talking any of eight languages on the US computer giant's account alone.
Mr Shafei lauds the fact that transatlantic fibre optic cables pass through the Suez Canal, which keeps phone bills down. And there is space for expansion should UK companiesfollow Microsoft's lead: he is equally excited about Xceed's empty floors as its full ones.
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