East African mobile operators outsource call centres and HR to concentrate on winning competition battle
More mobile operators keep entering the fray: in Uganda a sixth licence holder (Essar) has just got a licence and in Rwanda a third licence operator (Millicom) will start at the end of the year. Staying alive under this kind of competitive pressure means concentrating on the main task of winning market share and cutting costs. So as the market matures this means outsourcing those things which are not central to that task. This started with network management but will soon include other areas like call centres and HR. Russell Southwood spoke to two industry veterans last week in Kampala who have been providing these services to mobile operators in the region.
The argument for outsourcing cost centres within mobile operators at this stage of market development is two-fold. Firstly, management time is precious under pressure and should not be taken up with things that are not central to the success of the company. Secondly, as competition increases, the focus for mobile operators shifts from being just about growing revenues to needing to work on the other side of the equation, controlling or cutting costs.
There have been a number of straws in the wind over the last three years. One of Ghana’s smaller mobile operators has a management contract with Chinese vendor Huawei to build and manage its network. In Nigeria Helios builds mobile masts and leases them to operators. But now outsourcing is moving into new functional areas, particularly where the owner is primarily an investor rather than a day-to-day manager in all areas/
Uganda’s NFT Consult was set up four years ago by two people who had already worked for a long time in the industry to offer these kinds of services. Badru Ntege ran one of Uganda’s ISPs and his wife Elizabeth used to work for former incumbent utl. But as Badru says with a smile:”It’s easier to become a service provider to the service provider than being a service provider.”
The company was set up to offer something more than the recruitment agency function for the high-value sectors in African economies like telecoms, IT and banking and finance. So when Kenya Commercial Bank set up in Uganda NFT Consult handled all the recruitment from the most senior manager right down to the most lowly security staff. Its service offer is that it can recruit, run payroll and manage staff for large companies, particularly mobile operators.
In Uganda it started supplying these services to the market leader MTN. The initial contract included a clause insisting on exclusivity but NFT Consult explained their point and stood their ground. Another example is a Chinese vendor operating in Uganda for whom NFT Consult took on 77 local technicians. Overall, it employs 600 people on behalf of others including banks, IT companies and telcos.
The extension of this service was to start supplying staff for a call centre for former incumbent Rwandatel in neighbouring Rwanda. These staff provide cover 24/7 and cost US$1,500 per seat per month at entry level. Rwandatel currently has around 600 staff to handle its 200,000 subscribers which it switched from CDMA to GSM at the end of last year.
The call centre handles 300 calls an hour with a 20 person shift. Staff are targeted to either answer the call in 200 seconds or escalate it to back office staff who do not have time targets. The call centre operates in all three languages of the country: Kinyarwanda, English and French. NFT Consult trains the staff and supplies them ready to go. Based on this experience, NFT Consult is looking to set up a call centre for company in the financial sector some time this year.
The call centre work attracts students, particularly women. For the difficult night shift, there is an additional 10% allowance and because there are less calls, there are plenty of takers. As Elizabeth Ntege said:”The transformation after the first pay-check is amazing. They come in better dressed than me!” For many of those recruited it’s a chance to earn up to ten times more than they were earning. One of their office’s security guards even applied and is now one of their best workers.
In some cases they have taken on the management of staff. When this happened, they installed a fingerprint post to check people in and out so they could track the number of hours worked. As Elizabeth says:”At the end of the first month, the staff were shocked by how little they had worked and they only got paid for the hours they worked.” However the company does pay benefits and wrestles with being hard-nosed about productivity in cultures where this is not the norm.
Selling this kind of service has not been easy but one contract has led to another and the business has grown rapidly. It requires trust that the supplier will be as professional as you and not allow mistakes that will tarnish your brand. It requires a shift from running staff to managing contractors, the latter being a skill that is only just developing in Africa.
The Nteges also run a separate business, Mobile Payplus that again offers ways to operators of streamlining their processes. The company has a contract with a US company called More Magic selling Electronic Distribution Voucher POS equipment to eliminate scratch card sales. It takes a percentage of revenues which gives it an incentive to increase electronic sales.
It has adapted the device to work on PCs with POS software in supermarkets so that you can go shopping and buy airtime. The access codes for the airtime appear on your till receipt for the goods. The same software can also go as a Java application on a mobile phone for street sellers and there’s also a web version. This same web version can be used by the dealers to order up more airtime.
The company has a contract with Zain in Uganda to provide this service and it runs a team of people in the field to work with the vendors. Among its clients is a supermarket with 400 outlets.
The initial sell to the operators was not easy as Badru Ntege conceded:”The operators do not take responsibility for the physical minutes on scratch cards once they’re sold because anything could happen to them. So initially, they weren’t much interested.” It sold to one one of utl’s biggest dealers, Telchoice and it was sufficiently impressed to recommend them to all its other dealers.
More Magic is an ISO approved platform than can interface with banks and credit card companies like Visa and Mobile Payplus is looking at being able to offer this as an option in the future.
For years global airlines have offered their customers services that were provided by other contractors. It can be done and for mobile operators it may be one route to controlling costs in ever more competitive markets.