Despite government's aim to introduce reduced Telkom tariffs for the business process outsourcing (BPO) industry by the end of 2009, the Competition Commission says it has not received an application from the industry to take advantage of low rates.
In July last year, it was speculated that Telkom was ready to announce reduced tariffs for the BPO sector - but no new tariffs were introduced. The Department of Trade and Industry (DTI) also stated that, although the pricing hadn't been forthcoming, Telkom had offered the BPO industry competitive tariffs.
To qualify for lower tariffs, as an industry, BPO organisations would have to tender a request to the Competition Commission, which may grant an exemption under Section 10 of the Competition Act.
Exemption would be granted if the anti-competitive agreements or practices contribute to “the economic stability of any industry designated by the minister”. These exemptions apply only to restrictive agreements or practices, which are prohibited by the Act.
“Exemption for anti-competitive agreements can be granted - but we haven't received an application for this,” says the Competition Commission.
The commission says, as it is a component of the DTI, the department cannot make an application for the designation of the BPO industry.
First steps
“The designation as a sector is required for the exemption. Yes, we will have to undertake an investigation - but this process is only proving to be lengthy because no requests have been made,” says the commission.
The DTI says that, while reducing the operating costs of BPO is a priority, the industry now has to rely on special cash incentives and other programmes designed to bring call centres into the country.
Trade and industry minister Rob Davies previously stated that “dialogue between competition authorities, sector regulators and business was something that had long been identified as necessary” and that the DTI was involved in the process of lowering telecoms costs.
The department was expected to spend R2 billion, over a period of three years, on this scheme and aimed to make SA the world's third-biggest BPO centre, after India and Philippines, by 2008. The DTI previously stated it would create 25 000 direct jobs and 75 000 indirect jobs by 2009 - but this has been pushed back to 2010 to ensure realistic target measures.
“We are working with industry to lower telecommunications costs. We've helped business with reducing other costs, but now we are working on lowering telecommunications costs - but we can only go so far. They have to take the final steps,” says the DTI.
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