India’s loss, Egypt’s gain: New BPO destination Egypt

India witnessed the rise of call center culture in early 2000s in cities like Mumbai, Gurgaon, Pune and Bangalore. However, after a boom in the BPO industry in the period 2004-06, the business margins of the industry has reached an all-time low.

Many Indian companies in the BPO industry have begun moving their operations to many other viable locations abroad such as Egypt, Philippines, China etc. resulting in the shift of a significant number of BPO jobs to those locations as well.

India losing out on its global market share in the BPO industry has been leveraged by other countries with several of them emerging as popular BPO destinations.
Colonial Style Architecture in Cairo. Source Wikipedia

BPO destination Egypt has been rising as a lucrative alternative to counter the inadequacies BPO companies face in India.

Primarily, the reasons why BPO in India is looking increasingly unattractive are inadequate language skills, poor infrastructure as well as costly manpower. As per a report in India Today of the March 25th issue, India lost around 40,000 jobs in the BPO industry to Egypt over the span of the last five years.

Egypt has been quite steadily focusing on leveraging certain qualities that the country’s population has which are useful for BPO industry.

The fact that there is a multi-lingual culture in Egypt, consisting of languages like English, Spanish, German and Italian as well as the country’s proximity to Europe has turned Egypt into a prime location for business process outsourcing.

Advantages of BPO destination Egypt

The ITIDA (Information Technology Industry Development Agency) of Egypt undertakes the task of the development of the ICT industry of Egypt with emphasis on BPO. The labor law in the country has been so designed to encourage private sector involvement while simultaneously balancing rights of both employers and employees.

There are several aspects that make it advantageous for companies to do business in Egypt.

  • Large multi-lingual talent fluent in a variety of languages like Spanish, English, German, Italian, French etc.
  • Nurturing of talent pool by ITIDA
  • The expenses of doing business in the country are low when compared to the countries in Eastern Europe. The costs are similar to that of India which makes BPO companies look towards Egypt as a viable alternative.
  • Egypt is strategically located in between Africa, Asia, US and Europe and has close proximity to Egypt.
  • The infrastructure facilities in Egypt have also been well invested into to boost the industry.

Accolades that Egypt has won over the years

Egypt was ranked as the outsourcing destination of 2010 by the European Outsourcing Association Awards in Brussels and ranked 4th in the A.T. Kearney Global Services Locations Index in 2011.

Cairo has been ranked as the 4th emerging city in the outsourcing scenario with Alexandria also showing marked improvement. In a report by CyberMedia and Commonwealth Business Council in 2009, the country ranked first among outsourcing destinations in Africa.

Egypt continues to raise its strength in the BPO industry and is poised for a tremendous growth. BPOs in India are claiming to be in a transformational mode especially in the non-voice segment. If this transformation does not perk up the Indian BPO industry, more jobs are likely to shift to new destinations like Egypt which seem to have recognized the potential of the industry and how to capitalize on the same.

However, on a positive note, J. Satyanarayana who is secretary with the Department of IT, Government of India, said to India Today that the country still is the prime outsourcing destination globally due to the mature customer-focused industry, large talent pool, domain expertise as well as proven track record that the BPO industry of the country possesses.

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