In a report just published, South Africa: An emerging offshore location, independent market analyst Datamonitor predicts that in four years, call centre numbers in the Republic of South Africa will be double those today. The study evaluates the country's proposition as an offshore outsourcing location.

Datamonitor expects the number of call centres in the country to almost double from 494 to 939 by 2008 - a compound annual growth rate (CAGR) of 14 per cent, over the period. The total number of 'agent positions'(APs) is predicted to rise to 69,600 by 2008, of which 6,200 will be offshore outsourced APs. APs are terminals from which call centre agents make and / receive calls to customers. Multiple agents can use the same agent position during varying shifts in a day.

It will slot in between nearshore locations such as Canada, Mexico or Eastern Europe, which offer close proximity and also cultural affinity to domestic markets, and more traditional offshore locations such as India and the Philippines that offer cheap labour.

"The RSA is not as much of a labour arbitrage cost play when compared to India and the Philippines," says Ryan Powell, Datamonitor call centre analyst and author of the study. Adds Ryan, "It offers multilingual and non-English language agents that are better able to deliver more differentiated customer service based on greater empathy and closer cultural affinity to customers in key target markets such as the US and western European countries like the UK, Holland, Germany and France."

According to Datamonitor, the country offers outsource providers a higher quality more culturally-aligned front-office and back-office location where labour costs are two-thirds of those in the US or UK equivalent.

South African call centres will be able to provide higher quality customer and sales services, with particular focus on the financial services industry. "The established call centre industry means middle managers already exist. Top-up training will bring those people up to suitable levels whereby they can best meet their offshore clients' requirements. State-funded 'learnerships' are helping to fill the staffing pipeline to the industry for the longer-term needs," says Powell.

The promised deregulation of the telecom market will bring about greater price competition and herald the long-awaited arrival of cheap voice over internet-protocol (VoIP) traffic, stimulating further demand for offshore operations in South Africa.

The Dutch market is expected to be the biggest non-English language market served from South Africa, since the Dutch language is the root of Afrikaans.