Reduction in telecoms costs and improved quality of voice services are key contributors to the sustainability of the BPO industry in South Africa, according to interim CEO of BPeSA Western Cape, Fagri Semaar.
In a recent trade mission to the UK, South Africa was highlighted as a prime BPO destination, with the only real areas of concern being the cost of telecommunications and latency rates of calls.
With the arrival of SEACOM in 2010 and the emergence of alternatives to Telkom, telecoms costs have continued to fall; making South Africa a more attractive investment destination for foreign business.
“Over the past three years telecoms costs have come down by around 40%, which has had a positive impact on various industries; with cost baskets related to telecoms falling from between 18 and 22% to just 8%,” says Semaar.
Semaar believes that telecoms is very important, especially for a global industry where every cent counts. “We need to constantly look at ways to not only reduce costs, but to improve the quality of our services.”
“Despite the cost reductions, South Africa is still a relatively expensive destination when it comes to telecommunications. The quality and reliability of lines to international countries is good, but our latency rate can be reduced. With SEACOM and the imminent arrival of the West African Cable System (WACS) in the first or second quarter of 2011, our offering to international destinations will become more competitive,” adds Semaar.
In another venture which is set to benefit the BPO sector, the city of Cape Town recently opened the first part of its 360km fibre network; which will link all its main municipal buildings, allowing the city to carry its own voice and data traffic.
At the recent Telkom/IEEE exhibition in Cape Town, Premier Helen Zille highlighted the importance of IT to the economic future of the Western Cape. She went on to discuss how the network will not only save the municipality money, but will allow it to resell its spare capacity at a very competitive rate.
“BPeSA Western Cape is currently in talks with the province on how the BPO sector can leverage off the networks benefits,” says Semaar. “Fast and affordable broadband is a major financial and socio economic driver, which government and the private sector must continue to push for.”
In a recent study conducted by the World Bank it was found that in low and middle income countries, every 10% increase in broadband penetration accelerates the economic growth of the country by 1.38%. “This shows how internet access can be a key driver of business,” adds Semaar.
Semaar says that all major countries have been through the same telecoms issues South Africa has. The good news is that change is inventible, but if it takes too long we could lose business to up and coming BPO destinations like Egypt or Kenya. To prevent this from happening, we need government and the private sector to continue to lobby for key industry issues and assist us in reaching our target of creating 100,000 jobs by 2014.
