Table of Contents

South Africa: An Emerging Offshore Opportunity - This report concentrates uniquely on the South African call center market, sizing the number of call centers and agent positions across South Africa as well as evaluating the country's proposition as an offshore outsourcing location.

Product Code: dmtc1066

Publication Date: 15-Nov-2004

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Overview

Introduction

Ten years into democracy, the call center industry in South Africa is ready for sustained growth through 2008, both domestically and as an offshore location. South Africa: An emerging offshore location sizes the domestic and offshore outsourced call center markets with agent position and call center numbers, vertical splits and analysis of demand market opportunities.

Scope

· Revised forecast for the call center industry in South Africa, sized by agent positions and call centers, split by size band and vertical.

· Two growth forecasts for the offshore outsourcing call center market through 2008, sized by agent position, call origin and vertical market.

· In-depth analysis of South Africa's value proposition as an offshore outsourcing location, including a look at the nine provinces.

· Action points for providers with a presence in South Africa or those looking at establishing one going forward.

Report Highlights

The number of agent positions (APs) will increase from 38,400 in 2003 at a compound annual growth rate (CAGR) of 13% to reach 69,600 APs in 2008. The number of call centers is set to almost double, increasing at a CAGR of 14% from 494 in 2003, to 939 in 2008.

The most optimistic Datamonitor forecast predicts that the number of offshore outsourced APs will quadruple from 1,400 in 2003 to reach 6,200 in 2008, which represents a CAGR of 34%.

South Africa offers outsource providers a higher quality more culturally-aligned front-office and back-office location where labor costs run at two-thirds of their US or UK equivalent.

Reasons to Purchase

· Understand the size, maturity level and growth potential for South Africa's call center industry.

· Drill down on South Africa's position as an offshore location for call centers and understand how the market dynamic is changing there.

· Understand where to locate call centers in South Africa, based on analysis of each province.

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CHAPTER 1 EXECUTIVE SUMMARY	3
Introduction	3
Call centers in South Africa	3
South Africa: under the hood	3
Action points	5
CHAPTER 2 INTRODUCTION	12
What is this report about?	13
CHAPTER 3 CALL CENTERS IN SOUTH AFRICA	14
Introduction	14
Key findings	14
State of the call center industry in South Africa	15
Introduction	15
Observations	15
South Africa Contact Centre Community (SACCCOM) is live	15
South African agent positions, 2003 - 2008	16
South African call centers by size band, 2003 - 2008	17
South African vertical market breakdown, 2003	19
Offshoring and offshore outsourcing	20
Global offshore outsourcing recap	20
Offshore call center outsourcing in South Africa	21
Introduction	21
South Africa offshore call center and AP numbers	21
Conservative forecast	22
Optimistic forecast	24
The offshore call center market in South Africa by vertical	26
Origin of offshore call center outsourcing, 2003 - 2008	28
Conclusions	31
CHAPTER 4 SOUTH AFRICA: UNDER THE HOOD	32
Introduction	32
Key findings	32
South Africa's value proposition	33
Cultural affinity	33
Established call center industry	33
Labor rates	34
First-world infrastructure	35
Basic infrastructure	36
Technology infrastructure	36
The distance factor	37
A beautiful location	38
Multilingual staff	39
Learnerships and work ethic	40
Addressing concerns with South Africa	42
AIDS	42
Apartheid legacy	43
Black Economic Empowerment	43
The scorecard	45
Addressing concerns	46
Competition	47
Crime	48
Currency fluctuations	48
How to position South Africa	50
Balanced risk portfolio	50
A glimpse of the future - blended offshore virtual call centers	50
Locating call centers in South Africa	51
Introduction	51
Geographical location of offshore APs in South Africa	51
Principal locations for (offshore) call centers and agents	52
Gauteng (Johannesburg/Pretoria)	52
Western Cape (Capital: Cape Town)	53
KwaZulu-Natal (Capital: Pietermaritzburg/Ulundi)	54
The other provinces	54
Eastern Cape (Capital: Bisho)	54
Free State (Capital: Bloemfontein)	55
North West (Capital: Mafikeng)	55
Limpopo (Capital: Polokwane)	56
Mpumalanga (Capital: Nelspruit)	57
Northern Cape (Capital: Kimberley)	57
Service providers in South Africa	57
Make up of the market	57
Table of players	58
Profiles of selected call center providers in South Africa	59
3i Solutions	59
Call Centre Nucleus (CCN)	59
CSC	59
Dialogue Group	60
EDS	60
Merchants	60
Mindpearl	61
Conclusions	61
CHAPTER 5 ACTION POINTS	62
Action point 1 - Establish operations in target markets	62
Action point 2 - Support deregulation to spur growth	62
Action point 3 - Balance offshore risk portfolios	63
Action point 4 - Target key verticals in the US and UK	63
Conclusions	63
CHAPTER 6 APPENDIX	64
Definitions	64
Acronyms new in this report	64
Helpful definitions	64
Call center	64
Vertical markets	65
Research methodology	66
Future reading	67
Report titles	67
Datamonitor's strategic planning products (SPPs)	67
SPP writing team	68
Report author	68
Report manager	68
How to contact experts in your industry	68
List of Tables
Table 1: Firms offering call center capabilities in South Africa	5
Table 2: Agent positions in South Africa, 2003 - 2008	16
Table 3: Call centers in South Africa by size band, 2003 - 2008	18
Table 4: Offshore outsourced APs globally, 2002-2007	21
Table 5: Conservative forecast for offshore outsourced APs in South Africa, 2003 - 2008	23
Table 6: Optimistic forecast for offshore outsourced APs in South Africa, 2003 - 2008	25
Table 7: Offshore outsourced APs by vertical, 2003 - 2008	27
Table 8: Price per hour of South African outsourced agents, 2004	35
Table 9: Distances between domestic and offshore locations	37
Table 10: Time differences between domestic and offshore locations	38
Table 11: 11 official languages of South Africa in alphabetical order	39
Table 12: European languages supported in South Africa	40
Table 13: Key definitions from ICT BEE Charter (Fourth working draft)	46
Table 14: South African currency fluctuations, 2002 - 2004	49
Table 15: Firms offering call center capabilities in South Africa	59
List of Figures
Figure 1: South Africa's provinces and principal cities	12
Figure 2: Agent positions in South Africa, 2003 - 2008	17
Figure 3: Call centers in South Africa by size band, 2003	18
Figure 4: Call center market composition by vertical, 2003	19
Figure 5: Conservative forecast for offshore outsourced APs in South Africa, 2003 - 2008	23
Figure 6: Optimistic forecast for offshore outsourced APs in South Africa, 2003 - 2008	25
Figure 7: Offshore outsourced APs by vertical, 2003	26
Figure 8: Offshore outsourced APs by vertical, 2008	27
Figure 9: Offshore outsourced APs in South Africa by target market, 2003	29
Figure 10: Offshore outsourced APs in South Africa by target market, 2008 (conservative forecast)	30
Figure 11: Offshore outsourced APs in South Africa by target market, 2008 (optimistic forecast)	31
Figure 12: Offshore outsourced APs by province, 2003	51
Figure 13: Offshore outsourced APs by province, 2008	52

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