Telecoms costs still constrain BPO | ITWeb

By Nicola Mawson, ITWeb senior journalist.
Johannesburg, 9 Jun 2010

The cost of telecommunications in SA is still too high, says the business process outsourcing (BPO) sector. This hampers its competitiveness, despite the promise of cheaper connectivity through new undersea cables.

Seacom landed last July, and the Eastern Africa Submarine Cable System (Eassy) should be up in August. The West African Cable system is also due to arrive soon.

However, the cables have not significantly forced down the cost of connecting internationally, says umbrella body Business Processing enabling SA (BPeSA).

Acting CEO Bulelwa Koyana says the increase in bandwidth should have reduced costs for players in the sector that use voice over IP to connect internationally. However, the reduction in costs has not taken place as the industry had hoped.

A few years ago, the BPO industry, through the Department of Trade and Industry, applied to Telkom for a concessionary rate. However, this bid was abandoned after it was decided this would be anti-competitive and would be thrown out by the competition authorities.

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