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| Growth: Gilda Odera, managing director of the Skyweb-Evans call center in Nairobi, Kenya, says that the center will soon expand
its capacity threefold. Rob Crilly |
World's next outsourcing hub: Kenya?
The Kenyan government is pumping millions of dollars into improving the nation's outdated telecom industry.
from the December 21, 2007 edition
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"If we can get it below $500 for that megabyte we can make ourselves more competitive," said Mr. Ndemo.
Work on the 3,062-mile East African Marine System (Teams) cable is due to begin early in the new year.
The $82-million cable will run from Fujaira, in the UAE, along the seabed of the Gulf of Oman and down the African coastline to Mombasa. It is expected to bring the cost of connectivity down to about $500 per month immediately on completion in January 2009.
In the meantime, the government will use $9 million from a World Bank loan to subsidize connections and kickstart the industry in the new year.
Two other cables are also being planned.
The much delayed East Africa Submarine Cable System will eventually run along the Indian Ocean coastline, connecting 10 African cities with India and Europe. And a third will run from Europe to South Africa.
Ndemo said the cost will continue to come down as Kenya becomes a hub for East Africa, selling bandwidth to neighbors such as Tanzania, Uganda, and Sudan.
Mark Kobayashi-Hillary, off-shoring director of Britain's National Outsourcing Association, says Kenya is putting itself in a strong position.
"In Kenya – and the East African region – they have quite a good recent history of democracy, so it is a stable region and there are lots of well-educated people," he said. "That's a good start, but what they don't have is the infrastructure and I guess that's the importance of this fiber-optics deal."
A promising future
Research by the London-based business analysis group Datamonitor supports the optimistic outlook.
In a report published last year, the group forecast that Africa would see the fastest growth in the number of call centers for the rest of the decade, and singled out Egypt, Botswana, Ghana, and Kenya for particularly rapid expansion.
Egypt already has a booming outsourcing industry with many Western companies operating there.
Meanwhile, Botswana, Ghana, and Kenya – all former British colonies – have the sort of linguistic skills and education systems that make them well placed for call centers, according to the report.
And signs of a shift in the global pattern emerged earlier this year as several Indian companies began looking to outsource their own outsourcing operations, as rising wages and crumbling infrastructure took their toll.
Across town from Skyweb-Evans, Kencall is the posterboy for Kenya's outsourcing industry.
Kencall employs 500 people in a converted avocado warehouse on an industrial estate close to Nairobi's international airport.
Nicholas Nesbitt, its chief executive, says there is a ready pool of investors looking to enter the Kenyan industry, particularly from South Africa where labor costs are much higher.
"We've had a good three or four very big international call center companies coming through Kenya and kicking the tires," he says.
"As long as we can keep the drumbeat of Kenya as a good and positive place to invest, then when the time comes people will move in."
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