BTTB
07-09-2004, 06:41 PM
http://www.finance24.co.za/Finance/Companies/0,,1518-24_1569347,00.html
Telecoms costs SA's enemy no1
06/08/2004 14:07 - (SA)
Johannesburg - Business process outsourcing (BPO) could become a massive market for South Africa but the country has lost the business of 32 international companies "over time" due to high local telecommunications costs.
This was said by specialised business process outsourcer eQuals Group noted on Friday, quoting the department of trade and industry (DTI) as a source of its information.
eQuals CEO Eric Wadsworth said the numbers cited only account for statistics that came through the DTI's office, meaning the overall loss to business could be even larger.
"Most of the lost contracts, it seems, relate to call centres. The problem is, no matter how good our service levels are - and no matter how we try to keep our overall charges competitive - we cannot do much about telephone costs.
"This is one of the most fundamental costs of outsourcing work, like call centres."
The Notebook Company CEO Christopher Riley said one of the biggest obstacles to the growth of South Africa's information communications technology industry is the "high cost of communications".
The company is a notebook and accessories retailer.
"The once fairly disparate technologies of computer technology and telecommunications, due to the advent of the true digital age, are now essentially converging.
"The one cannot operate efficiently without the other. Our problem is that we cannot be globally competitive if we have a monopoly in the telecoms market," Riley said.
"Companies are standing in a line to run their call centres through India because of lower labour costs. If you consider that India has full access to voice over internet protocol (VoIP), this enables them to keep their communications costs to a minimum.
<b>"We do not have that edge in South Africa as VoIP is still regarded as illegal."</b>
Great irony
Riley said the DTI's good job - in promoting the country as a prime destination for call centres and other BPO work - will be ineffective if the outsourcing industry does not compete from a telecommunications point of view.
"It's like fighting with one hand tied behind our backs. The irony is that Telkom, once a state asset - and effectively built up by the financial payments of the local population over many decades - has now transformed into a company that is listed in the US and seemingly only has its eyes on profits," he continued.
"It still has the benefit of being a monopoly locally, but, now that it is listed, it has adopted commercial business practises, with an eye to making returns for its shareholders.
"Naturally any business wants to turn a profit. But Telkom's total revenues, and profits, have lately been stratospheric. At the same time they are actually shedding jobs - even though profits are on a very steady rise."
He noted that while Telkom fights off any possible local opposition - such as barring companies from making use of VoIP, the company is disabling the entire ICT industry in the country, making it compete at a distinct disadvantage with other offshore industries.
"There is great irony in the fact that the government's main focus is to empower the economy and to create more jobs and prosperity, and yet business at large is hamstrung by one monopoly that - if countered - would open up our chances of really competing on an equal footing with any country in the world.
"That alone would create business and jobs, including more work in the BPO industry," Riley said.
Edited by Mahap Msiza
<b>Sorry to post an older article, but I thought it relevant to the DOC announcements. A month ago when this article was published we were merely hoping for the Announcement of the SNO, which seems a non-event now, but this following statement bears reference,
"We do not have that edge in South Africa as VoIP is still regarded as illegal."</b>
<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">
Telecoms costs SA's enemy no1
06/08/2004 14:07 - (SA)
Johannesburg - Business process outsourcing (BPO) could become a massive market for South Africa but the country has lost the business of 32 international companies "over time" due to high local telecommunications costs.
This was said by specialised business process outsourcer eQuals Group noted on Friday, quoting the department of trade and industry (DTI) as a source of its information.
eQuals CEO Eric Wadsworth said the numbers cited only account for statistics that came through the DTI's office, meaning the overall loss to business could be even larger.
"Most of the lost contracts, it seems, relate to call centres. The problem is, no matter how good our service levels are - and no matter how we try to keep our overall charges competitive - we cannot do much about telephone costs.
"This is one of the most fundamental costs of outsourcing work, like call centres."
The Notebook Company CEO Christopher Riley said one of the biggest obstacles to the growth of South Africa's information communications technology industry is the "high cost of communications".
The company is a notebook and accessories retailer.
"The once fairly disparate technologies of computer technology and telecommunications, due to the advent of the true digital age, are now essentially converging.
"The one cannot operate efficiently without the other. Our problem is that we cannot be globally competitive if we have a monopoly in the telecoms market," Riley said.
"Companies are standing in a line to run their call centres through India because of lower labour costs. If you consider that India has full access to voice over internet protocol (VoIP), this enables them to keep their communications costs to a minimum.
<b>"We do not have that edge in South Africa as VoIP is still regarded as illegal."</b>
Great irony
Riley said the DTI's good job - in promoting the country as a prime destination for call centres and other BPO work - will be ineffective if the outsourcing industry does not compete from a telecommunications point of view.
"It's like fighting with one hand tied behind our backs. The irony is that Telkom, once a state asset - and effectively built up by the financial payments of the local population over many decades - has now transformed into a company that is listed in the US and seemingly only has its eyes on profits," he continued.
"It still has the benefit of being a monopoly locally, but, now that it is listed, it has adopted commercial business practises, with an eye to making returns for its shareholders.
"Naturally any business wants to turn a profit. But Telkom's total revenues, and profits, have lately been stratospheric. At the same time they are actually shedding jobs - even though profits are on a very steady rise."
He noted that while Telkom fights off any possible local opposition - such as barring companies from making use of VoIP, the company is disabling the entire ICT industry in the country, making it compete at a distinct disadvantage with other offshore industries.
"There is great irony in the fact that the government's main focus is to empower the economy and to create more jobs and prosperity, and yet business at large is hamstrung by one monopoly that - if countered - would open up our chances of really competing on an equal footing with any country in the world.
"That alone would create business and jobs, including more work in the BPO industry," Riley said.
Edited by Mahap Msiza
<b>Sorry to post an older article, but I thought it relevant to the DOC announcements. A month ago when this article was published we were merely hoping for the Announcement of the SNO, which seems a non-event now, but this following statement bears reference,
"We do not have that edge in South Africa as VoIP is still regarded as illegal."</b>
<b><hr noshade size="1"></b><font size="2"><font color="red"><b>You can take Telkom out of the Post Office but you can't take the Post Office out of Telkom.</b></font id="red"></font id="size2">