India faces BPO challenge from Kenya and other East African countries
Babu Ghanta
Mar. 7, 2005

India’s BPO sector is facing increasing challenge from Kenya and other East African countries. South Africa also plans pose a strong challenge. The main daunting problem for India especially in Bangalore and Chennai is low quality in BPO services.

India will soon face some tough competition in offshore and outsourcing operations from an unexpected quarter--Africa. East Africa has just made its first stride with the unveiling of KenCall, Kenya's first international call centre. Following the footsteps of Philippines and China, which are already providing high-quality work at an affordable cost, Africa is finding its voice on the global call centre circuit.

The Republic of South Africa is already a hive of activity. Furthermore, a report just published by independent market analyst Datamonitor, leaves little doubt that North Africa, once one of the offshore destinations of choice for French-language customer care, is fast proving an extremely attractive option for many Western European and North America firms who are looking to service Spanish and English speaking customers.

The report, "Profiting from the North African Option," expects 2009 outsourced call centre agent positions in North Africa to almost quadruple on today's total of 3,500. "North Africa has a lot to offer firms looking for a viable, multilingual environment in which to house customer care operations. What will be key to success is for outsourcers to locate in the region most appropriate for their operations, and to establish partner networks, specialising in areas of expertise best served from North Africa," Peter Ryan, call centre analyst at Datamonitor and author of the study, told HindustanTimes.com. "This will lead to lower overall costs, and increased customer satisfaction. In conjunction, multi-country country strategies can be harnessed within these networks for lower-value functions, while the threat from in-house operations will be minimised," he said.

In terms of location, Datamonitor expects the most prosperous regions to be Egypt, Tunisia and Morocco, due to their friendly investment attitudes, and advanced state of technological and commercial development. However, Ryan noted that essentially, we see that India will still remain strong for the foreseeable future. While locations in Africa may take some agent positions from western investors, the large labour pool and competitive prices in India will remain a key driver for contact centre outsourcing to that country." Growth of outsourced offshore agent positions are set to more than treble on 2004 levels.

Over the past decade, North African contact centre locations have adopted varying pro-investment agendas, offering a multitude of tax cuts and incentives to lure private enterprise to their jurisdictions. Nearly every country in the region has made efforts to bring in outsourced contact centre investment. According to Datamonitor, the number of outsourced offshore agent positions in North Africa will rise from 3,500 in 2004 to 12,800 by 2009, an increase of 265 per cent over this period. While the market for these services is more mature in Morocco, Datamonitor expects growth in Egypt and Tunisia, due to their friendly investment attitudes and geographic niche-market advantages. North Africa has generally been the offshore destination of choice for French-language customer care. However, potential also exists for English and Spanish offerings, depending on the particular location.

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