7 September 2007
The offer of discounted telecommunications prices has lured three foreign call centre companies to commit to investments worth around R400-million that will create up to 10 000 new jobs in South Africa, Business Day reported this week.
Department of Trade and Industry director-general Lionel October told Business Day that one of the three unnamed firms – two European and one US-based – would be setting up an operation running to a few thousand seats, while the other two would set up 500- to 600-seat centres.
According to Business Day, the government had finally, after months of negotiations, reached agreement with state telecoms company Telkom on a “developmental pricing model” for the country’s business process outsourcing (BPO) sector – although Telkom had not released details of the agreement.
Trade and Industry Minister Mandisi Mpahlwa said in March that South Africa was looking to its BPO sector to help drive economic growth, and would be offering investors incentives in the form of start-up and expansion grants and reduced telecommunication fees.
BPO involves relocating certain business processes that are usually performed in-house by a company to a third party service provider, such as customer care or call centres, to carry out the services on behalf of the concerned company.
Traditionally, countries such as India and the Philippines have led the way in servicing markets for the United States and Britain, among other countries. South Africa is quickly catching up, however, thanks to a range of factors working in its favour.
South Africa is mainly targeting clients from the UK, Europe and the US due to closer cultural ties, use of the English language and, in the case of Europe, being in a similar time zone.
BPO is considered a key sector under the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA), which seeks to achieve an annual economic growth rate of 6% between 2010 and 2014, in order to halve poverty and unemployment by 2014.
Mpahlwa said in March that the sector had the potential to create up to 25 000 direct and 75 000 indirect jobs, and contribute about R7.95-billion to the country’s economy, by 2009.
“In the first six months of 2006, South Africa created 3 000 jobs in this sector. Based on this evidence, we are of the view that we should achieve our targets of 100 000 new jobs by 2010,” he said.