South Africa targets outsourcing market

The South African government threw down the gauntlet to rivals such as India yesterday in the race to capture outsourced jobs, such as call centre operations, from the UK and other western countries.

Ebrahim Rasool, premier of South Africa's Western Cape, said the country was in a position to offer a "credible alternative" to India as an outsourcing centre thanks to its stable economy, relatively low costs and the advantages of its time zone proximity to the UK and the rest of Europe.

The biggest spur to growth, Mr Rasool said, would be the February 2005 deregulation of South Africa's telecoms industry, which would lower costs even further.

Mr Rasool said in Cape Town yesterday: "We are signalling that South Africa is open for business as an exciting offshore market and as a credible alternative to existing offshore destinations."

South Africa's infant outsourcing industry is worth about R700m (£60m). However, Mr Rasool said British financial services companies that had already outsourced jobs to the country were achieving 40 per cent cost savings.

Banks and insurers such as Barclays and the recently floated Admiral Insurance have outsourced jobs to South Africa in recent years. Carphone Warehouse and Centrica are two British companies with call centres and sales operations in the country.

"Companies are getting these cost savings while maintaining UK standards of customer satisfaction," Mr Rasool said.

Calling the Cape, a trade body backed by the government that encourages British companies and others to transfer jobs to South Africa, said: "India's supremacy as the Number 1 choice for UK companies locating contact centres and business process operations in lower-cost offshore locations is about to be challenged."

First-time call resolution - a standard contact centre quality measure based on the number of customer queries resolved on first point of contact - stands at 89 per cent in Cape Town's call centres compared with only 65.9 per cent in India's, the trade body said.