DTI promises investment boom

Johannesburg, 30 Jan 2009

The Department of Trade and Industry (DTI) will open an investment call centre.

The call centre forms part of government's “plan of action”, which is aimed at reducing the cost of operations for international investors in order to attract increased foreign investments.

The call centre will be located in Moroka, Soweto, and will be officially opened in March. The centre will register and monitor the processing of investment applications valued at over R100 million.

The DTI says the centre will be a “10-seater technologically advanced call centre" and will provide employment to people with disabilities.

High expectations

In an effort to accelerate local economic growth, Cabinet approved a plan to adopt business process outsourcing (BPO) as a key industry for national development in 2006. Plans included the creation of a state incentive scheme for BPO - with a particular focus on the development of call centres.

The department was expected to spend R2 billion over a period of three years on this scheme - and aimed to make SA the world's third-biggest BPO centre, after India and Philippines by 2008.

The plans aimed to involve the private sector in the marketing and easy entry into SA for the expansion of existing BPO operations, skills development, simplifying administrative procedures and other investment incentives.

Former President Thabo Mbeki, in his 2006 State of the Nation address to Parliament, identified the call centre industry as one of the high-potential sectors targeted in the government's strategy to boost the country's economic growth rate and create employment.

The DTI also announced that it would work with Telkom to lower the cost of telecommunications in SA and promote the sector with the hope of creating up to 100 000 jobs over the next five years.

Long way to go

While economic and political stability increase the appeal of SA as a top call centre destination, the country still struggles with some requirement, such as skilled labour and cost-effective telecommunications infrastructure.

“A huge amount of work has been done and a lot has been improved. Things are also likely to improve with the expected [bandwidth] price reductions with the new [submarine] cables - the first of which is expected in June,” says Keryn House, CEO of ContactinGauteng.

But some investors are still not convinced by these improvements, says House. She says that there are international companies which, when considering SA as a destination for their call centre operations, say that they will not come into the country until there is an equivalent competitor to Telkom.

But they are still willing to look, adds House. “Investors are seeing that the landscape is changing. 2010 has also pushed our capabilities and we're also very excited about the International Broadcast Centre, which Nasrec is hosting. We know we'll have great connectivity to work with.

“The call centre industry is a great job creator and we're committed to working together with government, but we still have a long way to go,” she says.

Losing on cost

We can't compare ourselves directly to flourishing destinations such as India and the Philippines, says House. “We position ourselves as being 40% cheaper, while India and Philippines are 70% cheaper - we can't compete with that.”

South African call centres position themselves as quality destinations in the areas of voice and customer service due to the country's cultural affinity with the US and UK.

House notes that, in the areas from English voice and conversational English ability to service and cost, compared to the US and UK, SA is strong and that those strengths will attract international investments.

She adds that “our high-tech lifestyle and advanced infrastructure” differentiates SA from India and the Philippines and works in the country's favour.

But the effect of the global recession and the declining economic situation cannot be ignored. House notes that risk diversification is key for companies and that countries looking to spread their operations will consider SA as a destination - despite costs and skills concerns.

“We are the strongest location in Africa - after Egypt - and many companies are looking to having a presence in Africa,” notes House.