Dialogue geared to expand

Johannesburg, 11 Dec 2006

Johannesburg-listed call centre firm Dialogue aims to substantially grow its presence in SA and on the continent over the next five years.

Within the next 36 months, Dialogue intends to have five call centres in SA, and be present in three other African countries, including Nigeria. The company will also look beyond its historic core ability and start focusing on processing activities on behalf of its clients.

However, CEO Jason Drew says the company has no interest in managing call centres that are located off the continent. In addition, he aims to keep the company's revenue split at 60% local and 40% international, which will act as a rand hedge and ensure stability of the pricing it can offer.

Dialogue, which listed in September, set aside R35 million of the R51 million raised in private placement for growing the company's infrastructure, acquisition opportunities and to facilitate the working capital requirements of the existing business.

In the first quarter of 2007, the company plans to have completed a 1 000-seat centre in Johannesburg's central business district. In the third and fourth quarters, it will start evaluating locations in East London and Port Elizabeth for another centre.

Drew says having several centres mitigates the risk of one being down, and the demand is there, he adds, pointing to a new MTN centre reaching a million calls in eight weeks from launch. The group's clients include MTN, Absa, Standard Bank, Edgars and McCarthy Call-a-Car.

SA is seeing interest from foreign firms, he says. "There has been a surge of interest in the last three to six months." He attributes this to several factors, one being the current level of the rand, which 18 months ago had made investment too costly.

Drew says a number of US and UK firms are considering moving their front-office centres to SA as a requirement for better quality interaction becomes important. SA, he says, may be more expensive, but offers better value. He expects to see a strong move towards a South African location over the next 36 months. "Quite a few big businesses are moving to SA now."

While the cost of connectivity is still a hindrance, he says the country is becoming more competitive in terms of broadband pricing. "There is a genuine opportunity of a very large scale for outsourcing in SA."

Follow the leader

On the continent, the company will follow its customers into new terrains, such as Nigeria.

Nigeria is expected to see its population double by 2050. The largest bank has five million customers, but there is not a single call centre in the country, says Drew. This is despite most of the population having cellphones.

Both Uganda and Egypt are expected to see population growth in the next few years. In addition, Drew says their economies are rapidly developing as a result of infrastructure development.

The trick, he says, is to identify the right time to move. Drew says, for example, Nigeria is 15 years behind SA in terms of financial infrastructure. In five years, it will have caught up.

Financial institutions are installing thousands of ATMs. Next, Drew expects to see pre-loaded credit cards in keeping with the country's cash culture. Such developments of financial infrastructure, and a shift in culture towards using such tools, will pave the way for call centres, he says.