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13 July 2024

High costs hit outsourcing business in UAE

High real estate cost is also discouraging outsourcing businesses to set up in the UAE (FILE)

By Nancy Sudheer

The global outsourcing business has a long way to go before it takes off in the UAE because of the high costs of real estate, telephony solutions and staff and the fact that voice over internet telephony (VOIP) is illegal.

VOIP is a general term for a family of transmission technologies that deliver voice communication over IP networks such as the internet.

"There is a zero chance of the international outsourcing market succeeding in the UAE," said Dominick Keenaghan, President of the Insight call centre training company. "The cost of real estate, telecoms and people are high in the region. Countries doing well in this space have their costs controlled. Most importantly, VOIP is not available and this will not encourage companies to come here."

Insight is organising the two-day Middle East Call Centre (MECC) 2009 conference and exhibition which began yesterday in Dubai.

"Ireland is the heart of the call centre industry in Europe and it achieved this status by offering cheap real estate, VOIP solutions and competitive salaries to employees. This is the same route that has to be adopted in this region."

Egypt and Jordan are the leading countries for international outsourcing in the Gulf.

"These countries are doing well because of government subsidies, the fact that VOIP is easily available and their bilingual populations. In Egypt, the government supports 70 per cent of training costs for employees in the call centre industry."

But though the UAE is not able to attract global outsourcing business contracts a number of companies are doing well on the domestic front. Dubai-based Mena Business Services (MBS) has 10 call centres across the region and much of its business comes from the UAE.

Piety Gonsalves, Chief Officer – IT and Business Development, said: "We are definitely interested in doing international business but regulations don't allow VOIP and the cost of bandwidth is another problem. For transferring calls from other countries we have been using Syria as our base. We are also looking at acquiring a call centre in India to support an additional language.

"It does not look like the UAE Government is keen at this stage and it is a challenge. The good thing is they now understand the benefits of outsourcing."

MBS has just signed up Aramco as a client and has just contracted telecoms operator MTN in Syria to manage 25,000 calls a day.

CTS, another UAE-based company specialising in providing call centre solutions, says there is sufficient business available locally.

Sajjad Hamid, Director of Sales and Marketing, said: "Though there are barriers to obtaining international contracts we have enough local businesses and companies now understand the relevance of outsourcing.

"We have just moved offices to the Dubai Outsource Zone because of our expanding business. Government subsidies in the form of rebates on telephony would benefit us tremendously."

Technology providers such as Al Futtaim Technologies, QPC and ATCOM have benefited from the growth of the local call centre sector.

Shailesh Thakur, Business Manager (Convergent Solutions) at Al Futtaim, said: "Our primary focus is the UAE and we do business across the region with a large presence in Pakistan and Africa.