Egypt: Busy Lines |
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Think of Egypt and outsourced contact centres may not be the first image that springs to mind. However, the industry has experienced considerable success, with more expected in the years to come.
There is no denying that Egypt is batting amongst the big-hitters in this particular field. A.T. Kearney's 2005 Annual Global Services Index supports the assertion. Out of 40 of the world's top contenders, Egypt is placed 12th, edging out Indonesia as a destination for outsourcing services, with Jordan being ranked 14th and the UAE taking 20th spot.
The reasons for Egypt's success are clear. The country's access to major international lines is hard to rival, with cables running beneath the Suez Canal, allowing operators easy access. The government meanwhile has pushed to develop an increasingly sophisticated telephone and information technology network, with solid and dependable infrastructure already in place. Managers do not have to worry about calling rates either, with calls to Europe and North America fixed at $0.07 and $0.05 per minute respectively. Such incentives mean that the cost of running call centres in Egypt is 20% cheaper than in rival markets abroad. And now with corporate tax rates slashed from 42% to 20%, and business confidence on a high, the bait for would-be investors is all the more tempting.
There cost of hiring and retaining customer care agents in Egypt is also more modest than elsewhere, up to 54% less than that for US employees serving inbound calls, according to the business intelligence company Datamonitor. Also helpful is the fact that Egypt enjoys a lower attrition rate than many other destinations, rated at less than 20% compared with 85% in India and the West.
Egyptians tend to stay with their jobs in this field and are not tempted as easily by other jobs offering a slightly higher salary, Adel Danish, CEO of Xceed - Egypt's leading contact outsourcing provider - told OBG. Call centre jobs are, after all, considered to be relatively prestigious and well paid by local standards, he said.
Having said this, the only market where the cost of outsourced customer care is less expensive than Egypt is India, with a far larger pool of workers to draw from. Datamonitor however points to the fact that the price difference between the two destinations is only marginal. Egypt meanwhile enjoys something of an edge compared to most if its competitors in terms of language, with many local schools and higher education institutions teaching in English, while some instruct in French and in German. Insiders also highlight the fact that Egyptian staff have a neutral accent when conversing in foreign languages.
There is also the question of education, with over 200,000 graduates leaving university each year in search of stable jobs. Of these, roughly 80,000 students graduate from IT-related disciplines, underlining the potential for future growth in the sector. No coincidence that Xceed has plans to open another contact centre in the east of Cairo. Having the likes of Alcatel, Siemens, Cisco and Lucent train up IT graduates is also helping the segment retain its competitive edge in terms of staff quality. Having all outsourced contact centre providers form an association - known as known as Call Centres Egypt - was the interest of the development of the industry was also hailed from all quarters.
Further growth is on the horizon, according to Datamonitor's 2005 outsourcing report.
The total market size of the Egyptian outsourced offshore contact centre sits currently at 655 agent positions [APs], the report said. This number is expected to rise rapidly over the next five years at a compound annual growth rate of just over 50%, to 3775 APs by 2009.
The report went on to say that the rate of local expansion is greater than that enjoyed by Mexico. That is in spite of Mexico's reputation as one of the fastest growing offshore outsourcing destinations.
All this means that Egypt's five key players, namely Xceed, C-3, Raya, Ecco and Tamima, can look forward to some good business as the domestic industry continues to grow. However, Egypt will also have to maintain its competitive edge in terms of high quality, low cost service for call centre seats to multiply in local headquarters.
© Oxford Business Group 2006
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