Western Cape Business News

Send  Share  RSS  Twitter  02 Jun 2009

INFOTECH: Electricity Hike Can Damage BPO Industry


Recent Western Cape Business News

The BPO sector in South Africa relies heavily on its ability to offer cost effective call centre solutions to potential investors. This however could all change if ESKOM is given the all clear for its proposed 34 percent increase in electricity prices.

The BPO sector in South Africa is feeling the effects of the credit crunch and as a result, even the smallest increase in work related costs could have a major impact on the success of the entire sector,” says Fagri Semaar Chairman of CallingtheCape.

Call centres require a large amount of electrical output to operate. Costs include; running computers and other call centre related equipment, lighting, cooling systems, 24 hour security protection, multiple backup systems, standby generators and an uninterruptable power supply.

According to CEO of CallingtheCape, Sipho Zungu, even a slight increase in electricity costs could have a huge impact on the BPO sector.

South Africa is currently viewed as a top call centre destination, because of a number of differentiating factors. These include; low attrition rates, qualified workforce, excellent infrastructure, cultural affinity and relatively low electricity costs.

If cost is no longer a differentiating factor, overseas investors may look to the likes of India and the Philippines as an alternative solution. By taking away one of the key competitive factors, South Africa could lose out on a large amount of potential business,” says Zungu. 

Over the past five years, the BPO sector has played a major role in the promotion of foreign investment into South Africa. This in turn has impacted positively on the job market, with 100, 000 jobs being created through the sector.

If Eskom is allowed to go ahead with the proposed 34% price increase, the BPO sector both locally and internationally will suffer,” adds Zungu.

CallingtheCape is a Section 21 company that promotes Cape Town and its surrounding areas as destinations for national and international investment in contact centres and business process outsourcing. Formed in 2001, CallingtheCape is funded by member contributions as well as by local and provincial governments.


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