Internet to boost outsourcing sector

Kenya’s outsourcing sector is expected to gain from increased internet connectivity this year.

This comes as players channel much of their investments into internet infrastructure.

Last year, the industry regulator, Communications Commission of Kenya (CCK), awarded Airtel Kenya and Telkom Kenya licences to roll out third generation (3G) networks, in a move that will allow them to offer superior internet services.

Three operators – Airtel, Telkom Kenya’s Orange and Essar Telecom’s Yu – had successfully lobbied for a reduction in 3G spectrum fees from the Sh2 billion ($25 million) Safaricom paid in 2007 to Sh800 million ($10 million).

Both Airtel and Orange say they expect to roll out the 3G commercial services in the first three months of this year, in a move they say will increase the penetration of data services through more competitive pricing.

Analysts at International Data Corporation (IDC) say Kenya and other African countries will this year get serious about building business process outsourcing (BPO) industries.

This, they say, is due to decreasing communications costs, increased BPO activity, foreign investment and expansion, as well as increased government focus.

The year will also experience increased information technology spend, according to Jyoti Lalchandani, vice-president and regional managing director, IDC Middle East and Africa.

“The region will continue to build on the post-downturn rebound in spending experienced in 2010. Investments to build out IT infrastructure will gain further momentum in most countries, particularly in the public sector,” Mr Lalchandani said.

With three undersea fibre optic cables – Seacom, The East African Marines System (Teams) and EASSy – already live, analysts say in 2011 players will need to focus more on the last mile and terrestrial fibre to expand access to rural areas.

In Africa, the research firm says, IT spending will grow by 10 per cent to touch Sh2 trillion ($25 billion) in 2011.