The telecommunications liberalisation announced last week will create a boom for the Western Cape’s already vibrant call centre market, predicts Luke Mills of industry development agency CallingtheCape.

The announcement by Communications Minister Ivy Matsepe-Casaburri that licensed value added network service (VANS) providers will be able to carry voice traffic over the internet (VOIP) has already led Dialogue, one major local call centre company, to cancel plans for an overseas venture in an alternative African destination in favour of keeping the operation in South Africa.

“We expect operating costs to become more competitive; the quality, standards and efficiencies of delivery to improve and infrastructure to be enhanced,” said Dialogue’s chairman Jason Drew. “This means South Africa can compete more effectively on global markets”.

CallingtheCape’s Mills says the liberalisation should reduce the per-minute cost of an international call for mid-sized call centres to about R0.20 (US$0.03) over the next 18 months, from the current R0.65 (USD0.10), the lowest cost reported by call centre operators in a recent survey. This would bring telecommunications costs in line with other offshore locations. Telkom already provides a highly effective specialist call centre solution, using some VOIP technology, which offers rates as low as R0.30 (USD0.04) per minute for 5 million minutes per month. With increased competition prices should fall, even for lower volumes, and service levels should increase.

“It’s a bold and far-sighted move by the Minister,” says Mills. “These reforms will over time make our rates competitive with those available in other offshore destinations and enable end-to-end VOIP to the desktop, which is a key requirement for some of the larger call centre investors. Add that to the Western’s Capes excellent skills base, work ethic and competitive costs, and the province is in a position to win a great deal of international business in the next few years.”

Mills believes the industry could grow by as much as 10,000 new seats by 2008. “We know there is currently some excess managerial capacity in the industry so we’re well able to cope with this kind of growth,” he adds. “Investors have always seen high relative telecommunications costs as a major obstacle; with that removed, the prospects for the industry couldn’t be better.”