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12 November 2007
Telkom’s decision to cut costs for BPO players welcomed by industry …100 000 jobs could be created within three years… The agreement reached between the South African government and Telkom, that will see the fixed line operator reducing prices for business processing and outsourcing (BPO) operators in the country, is expected to boost employment in the industry significantly, and encourage more companies to pursue this lucrative market, said Pule Mokoena, Group Executive: Marketing at Innovation Group, the South African subsidiary of London-listed global BPO outsourcing operation, Innovation Group plc. The long-awaited pricing agreement was announced by Trade and Industry Minister Mandisi Mpahlwa earlier this week. Mpahlwa said that negotiations between the Department of Communication (DoC) and Telkom - which had been dragging out- had been frustrating government’s efforts to attract investment in the sector. Said Mokoena: “This is something we, as one of the leaders in this marketplace, have been waiting for. The agreement will empower technology enabled solutions providers like ourselves, enabling us to offer even better customized and tailor-made solutions to clients. Besides attracting more foreign direct investment, the cut in pricing will make operators more competitive and will enable them to pursue – and win – more business. This is likely to create thousands more jobs in the South African economy,” said Mokoena. Karen Geldenhuys, managing director of Pretoria-based IT recruitment company, Abacus Recruitment, said the former Trade and Industry Minister, Alec Erwin, said in 2003 that he believed the outsourcing industry – just in call centre employment – could create 100 000 new jobs by 2005. This has clearly not happened. One of the reasons for this has been the cost of communications. The announcement by Mpahlwa is, therefore, exceedingly exciting news. It is a landmark event and we are likely to see thousands of jobs being created within the next three years. “The BPO market sector is booming and more and more companies are realizing the benefits of outsourcing certain business activities. There is still room for growth in this market and, with the new announcement, it is possible that this industry, as it grows, could create an additional 100 000 jobs within the next three years.” Innovation Group’s Mokoena said that although the discussions with Telkom had dragged on for a long time, Telkom should be applauded for its decision. “Naturally Telkom, like any other business, wants to make as much of a profit as possible. And although the fixed line operator is currently facing more competition in a changing telecommunications landscape, its current monopoly was stifling much of the potential in the BPO market. With one announcement, many doors have been opened.” With the pricing agreement being announced Innovation Group – which currently employs 800 staff members – believes it will see its staff head count grow “markedly” over the next three years. “Effectively this boils down to a job creation announcement,” he said. |