Cheaper lines for call centres
A government announcement on a dramatic reduction in telecoms costs for call centres, necessary to ramp up foreign investment in the sector, was expected within a month, Business Trust chief executive Brian Whittaker said yesterday.
Global spending on call centres, or business processing outsourcing, was expected to increase by $60 billion (R480 billion) over five years, Whittaker said. But with local telecoms costs 74 percent higher than those in India, investment in South Africa was being held back.
Public works minister Thoko Didiza confirmed that the appropriate person in the government would make the announcement. Didiza, along with trade and industry minister Mandisi Mpahlwa, is a member of Business Trust's outsourcing support programme.
Whittaker said: "I believe an announcement is imminent in lowering the cost specific to outsourcing operators linked to the department of trade and industry's incentive scheme."
He hoped the cut would result in a lower cost than India's. A 2 megabit line in South Africa cost R146 000 a month, while in India it cost R84 000. He "suspected" that in two weeks there would be "a better story". He said there had been long discussions between the government and fixed-line operator Telkom. "I understand there has been a breakthrough."
Business Trust is a partnership between big business and the government, aimed at kick-starting job creation in growth sectors such as outsourcing and tourism.
Asked why bandwidth costs remained so high, Whittaker said: "My short answer: don't privatise a monopoly." He was referring to Telkom, which listed in 2003. It started receiving competition for corporate business from Neotel only in 2006, after a much delayed deregulation process.
Low-cost emerging markets, particularly India, have captured a significant share of the global outsourcing market, worth $930 billion in 2006.
The trade and industry department's incentive scheme for outsourcing firms includes grants for new investments and training. Business Trust trains unemployed people to work in the sector. Call centres are included as a priority in the government's accelerated and shared growth initiative for South Africa.
Business Trust hopes to create a total of 100 000 outsourcing-linked jobs by December next year, with a ratio of one direct job for every three indirect jobs. By December the department had awarded incentive contracts that would create 35 136 of the 100 000 targeted jobs and attracted R600 million in foreign investment, according to Business Trust.
Calling the Cape chief executive Sipho Zungu said a major reduction in telecoms costs would be "a huge boost" for the industry, but higher labour costs than in Asian emerging markets deterred investment.
Business Report
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