Nairobi - Kenya is eagerly awaiting the imminent switch-on
of its first fibre-optic cable, which many hope will spark an
explosion in high-tech business and boost the East African nation's
struggling economy.
While many business are yet to work out how best to take advantage
of the bandwidth surge, one company is primed to ride the digital
wave and steal a slice of India's call-centre market.
Horizon Contact Centres sits on the edge of the traffic-choked
road that links the capital Nairobi to the airport and the coast.
On the other side of the highway sit the open plains of Nairobi
National Park, where wealthy tourists watch the wildlife. Only a
few kilometres away lies Kibera, one of Africa's largest slums, where
an estimated one million people live in shacks amid rivers of sewage.
The contrast between these faces of Africa and Horizon Contact
Centres could not be more stark.
The building is a glistening temple to technology, with biometric
entry systems, an array of electronic backups designed to ensure
24-hour operation and chill-out zones for stressed staff.
Chief Executive Officer Dave Stewart persuaded a consortium of
global investors to pump six million dollars into the company, which
he is convinced will open up a vital new income stream for Kenya.
Call centres are already well-established in South Africa, while
some French-speaking countries in North and West Africa service their
former colonial masters. In between, there has been only a void.
The key to the new market is the impending arrival of several
fibre-optic cables, which will replace the current satellite
technology, not only jacking up internet speeds but slashing costs in
East Africa.
'The fibre-optic cable is vital,' says Stewart. 'Satellite is five
or six more times expensive and it is unreliable.'
The government-backed TEAMS undersea cable is due to be
operational in a few months, followed closely by the Seacom and EASSy
cables.
Such is the expectation around the switch-on that President Mwai
Kibaki compared it to the completion of the Kenya-Uganda railway line
over 100 years ago.
'The economies of the last century were driven by railway
connections, the economies of today are largely driven by the
internet and other ICT (Information and Communication Technology)
links,' Kibaki said at a ceremony to mark the arrival of the TEAMS
cable in the coastal town of Mombasa in mid-June.
While suspicions abound that the launch was a publicity stunt and
that the TEAMS cable has not yet arrived, the excitement over the
potential benefits is very real.
The government has an ambitious - many say unrealistic - plan to
grow the economy by an average 10 per cent each year.
While analysts feel much needs to be done in terms of productivity
and the regulatory environment to unlock the full potential of the
fibre-optic cables, they see outsourcing as a way to drive the
economy forward.
'This industry would be another good foundation for the economy,'
says Robert Shaw, a Nairobi-based economic analyst. 'I would think as
it gathers momentum ... we will see an explosion in business.'
Kenya is in need of a leg-up. The economy is East Africa's
largest, but the country has one of the worst income disparities in
the world.
The double whammy of the violence that followed the disputed 2007
presidential elections and the global recession has not helped.
Kenya's economy - driven by manufacturing, tourism and agriculture
- maintained strong growth of around 5.5 per cent annually until
2008, when it dropped to 2.3 per cent. The World Bank estimates
growth will be 2-3 per cent in 2009, hit by reduced exports, foreign
inflows and remittances.
Stewart, however, believes the global recession can work in
Kenya's favour as companies look to cut costs.
'People realized India was cheaper, but there was a backlash,' he
says. 'Companies took their business back. Now things have changed.'
Kenya has all the ingredients of an outsourcing destination. The
Kenya National Bureau of Statistics puts the average salary in the
formal sector at 407 dollars per month, English is a lingua franca
and there is a highly skilled workforce to call on.
According to Stewart, the company received 6,000 applications
within a few days of first advertising in February. Most of the
company's employees have university or college degrees.
Horizon Contact Centres began servicing its first customer - a
British financial services company - on Monday and at the moment only
employs 80 staff. But Stewart plans to employ 1200 by mid-2010 and,
if things take off, an extra 1500 in an adjoining building after
that.
He believes it won't be long before a major call-centre industry
is operational in Nairobi.
'We need competitors, a critical mass, to become successful,' he
admits. 'I think it will begin to happen over the next year.'
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