Special call centre rates urged

By Christelle du Toit, ITWeb senior journalist
Johannesburg, 10 Sept 2007

Government needs to introduce reduced telecommunications rates for call centres and those in the business process outsourcing and offshoring (BPO&O) industry domestically.

This is according to Keryn House, CEO of ContactinGauteng, the industry body for Gauteng. The province has the most number of call centres in the country.

House says if growth in this sector is to be stimulated as per government aims, a general telecommunications concession has to be made for call centres.

"Telkom does have guidelines, but the industry generally has to depend on specific [commercial] negotiations to have reduced rates," explains House. "The guidelines keep changing because it is generally related to volume, as well as international calls versus local."

In March, minister of trade and industry Mandisi Mpahlwa launched the government assistance and support programme for BPO&Os in order to accelerate investment in the sector. It provides incentives for BPO&O companies that are starting up in the country and creating at least 100 new seats and a total of 200 new jobs. The initiative allows for tax breaks, investment support grants, as well as training and skills support grants.

Incentives needed

Three international companies recently received government subsidies through preferential Telkom rates to attract their business to SA. Telkom was, however, unwilling to divulge details of the deal it struck with the companies, or whether local businesses will benefit from these as well.

The Universal Services and Access Agency of SA (USAASA) says the industry needs more than the telecommunications discounts given to these three companies.

"High telecommunication tariffs hamper the establishment of more call centres, particularly in rural and remote areas of the country. Telkom is, therefore, urged to consider reducing its tariffs so as to get more players in the BPO sector," says USAASA CEO James Theledi.

Theledi says USAASA is considering a Universal Service and Access Fund to facilitate subsidy payments for call centres in poverty-stricken areas.

House says voice over IP technology has led to some cost reduction for the sector, but maintains: "We still need a national programme for call centre cost reduction - we need government intervention."

There are an estimated 60 000 to 80 000 agents employed in call centres across the country today. Government and industry targets set an additional 100 000 jobs by the year 2009, 25% of them directly related to call centres and 75% indirect.

"The only way to achieve this [the growth targets] is through radical increases in the number of companies," says House. "The big growth is through international investors, but they need incentives. We need exponential growth."

African perspective

The African telephony market is expected to reach about R3.4 billion in revenue by 2012, having already generated about R1.5 billion in 2005, according to the latest Frost & Sullivan research.

"Investments by government and government-aided organisations, contact centre service providers and the primary sector are stimulating growth in the African business telephony market," says the firm.

Frost & Sullivan industry analyst Shomik Banerjee says: "Multinational aid and international loans have helped governments finance secondary and tertiary sectors on the continent, creating a market for business telephony."

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