Invest in South Africa

Invest in South Africa

One of the leading economies in Africa, with a well-developed infrastructure and established trade links with the rest of the continent, South Africa is a suitable base for servicing a global customer base, while also providing access to the rest of Africa.

South Africa prides itself on being a world class BPO/contact centre destination. For more information on the location and to access links that will assist you in your destination making process click here. Should you require more information on setting up business in South Africa, please contact us on info@bpesa.org.za / 021 427 2900.

Brands Currently in South Africa

Why South Africa

We have collated detailed information to assist you on your decision making process.

Large Talent Pool

 South Africa is ranked 3rd among global locations that can support English services. In total 410,000 English speaking individuals are added to the national workforce annually across all educational streams. There are also large pools of foreign speaking individuals which allow the location to offer multilingual services with a focus on the German, French and Italian markets.

As a location, South Africa is well known for its cultural similarities with the UK, Australian and US markets and prides itself on its ability to offer EQ vs IQ based responses. This ability allows the location to offer service levels as good and in some instances better than the source locations

Deep Domain Skills

 South Africa prides itself on its ability to offer both entry level customer service work as well as complex back office processes.

  • South Africa’s tertiary education system produces a large number of qualified actuaries (three times as many as India), chartered accounts and other specialists each year.
  • South Africa’s data protection laws, products and certification are world renowned and are similar to those used in the UK and EU.
  • According to the World Economic Forum, South Africa ranked 1st in the world for Auditing and Reporting Standards.
  • South Africa is an internationally renowned Legal Process Outsourcing (LPO) destination, with strong legal skills similar to those found in Europe. Approximately 7,000 graduates are produced each year, while the local annual demand accounts for 3,000 of those graduates.
  • South Africa is a leader in international BPO standards and has been highly influential in the development of the global ISO contact centre standard.
Cost

 South Africa offers major cost savings to source destinations such as the UK of at least 50%, on a steady-state operating basis (including overheads). This is further added to be a national BPO incentive through the Department of Trade and Industry which pays prospective investors up to R184,000 per job created

Cost Breakdown

Infrastructure

 South Africa’s infrastructure is world class, from roads and power through to education, healthcare and entertainment, making it an easy place to conduct business from.

It is a number of international flights coming into the country with flights terminating in South Africa at convenient times allowing maximum productivity for trips to the region. Cape Town is currently one of British Airways top 10 travel destinations.

South Africa is well positioned to service the European market in terms of similar time zones, operating at on the same band as Rome. It is also strategically located to provide 24/7 customer support services to the US and Australian markets.

Relative to other BPO hubs the cost of living is low with Johannesburg is ranked at 154 and Cape Town at 179 out of 214 cities on the worldwide cost of living index1 (Mercer 2012) (lesser than Cairo, Nairobi, New Delhi, Kuala Lumpur, Warsaw, Dublin, and Prague).

Robust Enabling Environment

 The South African government works closely with the private sector, industry bodies and investors to create an enabling business environment. This is further added to by key partnerships between the industry association and international bodies such as the Rockefeller Foundation who BPESA are working with to promote Impact Sourcing in South Africa.

The South African telecommunications landscape has improved significantly since 2000. With costs falling by 85% between 2003 and 2009. The cost and quality of international bandwidth has been further assisted by the arrival of various undersea cables.

Lifestyle

 South Africa is one of the most beautiful countries with a lifestyle to match. From fine dining to outdoor adventures to world class schooling, it’s an expat experience that’s hard to beat. Below are some links that will give you a window into why South Africa is one of the best places to live in the world.

Telecommunications Landscape

Land, Mobile, Internet

 South Africa’s telecommunications infrastructure is considered the continent’s most advanced in terms of technology deployed and services provided, with a network that is 99.9% digital and includes the latest in fixed-line, wireless and satellite communication.

There are currently two landline telecommunications service providers operating in South Africa, namely Telkom and Neotel. Neotel is majority-owned by India’s Tata Communications, and was put up for sale in 2013. It is expected that Vodacom will purchase Neotel during 2014 should approval from the Competition Commission be granted. The landline market penetration in South Africa stood at around 7.8%* at the end of 2013.

There are four licensed mobile service providers operating in the country. MTN, Vodacom (majority owned by UK’s Vodaphone), Cell C (75% owned by Saudi Oger, an international telecommunications holdings firm) and Telkom Mobile, a subsidiary of Telkom. Mobile penetration is estimated to be about151% and it has been calculated that more people in South Africa use mobile phones than listen to the radio, watch TV, or use a personal computer.

Increasing mobile and smartphone usage has also lead to an increase in the number of South Africans using the Internet, this has resulted in an overall penetration rate of approximately 28% in 2013. South Africa also has a robust internet provider market which is evident in the size of the ISPA’s (Internet Service Provider Association) member list, currently sitting at168 registered members of varying sizes.

This information has been supplied by Internet Solutions.

Broadband Connectivity

 “South Africa Connect” is the government’s national broadband policy and associated strategy and plan. The vision for broadband in South Africa is “a seamless information infrastructure by 2030 that will underpin a dynamic and connected vibrant information society and a knowledge economy that is more inclusive, equitable and prosperous.” Targets set for 2030 include a 100% penetration at 10Mbps and 80% penetration at 100Mbps.

This information has been supplied by Internet Solutions.

Connectivity

 
 
Infrastructure

 As a result of liberalisation measures as well as the significant number of international submarine fibre optic cables landing in South Africa, the cost of telecommunications has reduced considerably in recent years and this downward trend is expected to continue.

The country is also seeing the positive impact of regulatory changes. The opening of the telecommunications landscape has seen a number of new alternate providers joining the larger, established, telco providers in supplying converged services to both the corporate and consumer markets.

At the end of 2013, South Africa’s undersea cable capacity was 14.04 terabits per second which is expected to increase dramatically with the addition of new cables that are planned for this region. There are plans for a South Atlantic Express (SAex) cable that will link South Africa with Brazil at a speed of 12.8 terabits per second, which has been tabled for 2015. This would mean that Brazil, Russia, India and China (BRICS) may be connected with a 12.8 terabits per second link. If built, because there are no contracts agreed yet, these will complement the broadband cables already online in South Africa: East African Submarine Cable System (EASSy), the West African Cable System (WACS) and Seacom. The new cable will assist with the reduction in cost of international capacity, however the impact on domestic pricing may not be all that significant.

LTE, the new generation wireless broadband technology took root in the country during 2013, although Vodacom was the first to deploy LTE a year earlier in 2012. Vodacom, MTN and Telkom have all launched commercial LTE networks and more sites are expected to go live in 2014. Cell C is planning to prepare a large number of sites to be LTE ready but have said their focus is currently on HSPA as they await Government announcements around spectrum and licensing.

As the country is waiting for both the Department of Communications’ Broadband Plan and ICASA’s decision on spectrum, South Africa will not meet the 2015 deadline set by the International Telecommunication Union. Once the switch is made though, the narrower and more efficient spectrum range that becomes available will be ideal for fourth generation or LTE networks.

This information has been supplied by Internet Solutions.

Undersea Cable History

 The following article is sourced from mybroadband.com

The global Internet is powered by thousands of interconnected networks in countries around the globe, and for South Africans to connect to these networks undersea fibre optic cables are needed.

Telecom’s infrastructure from local providers such as Vodacom, MTN, Telkom, or Neotel connects a person’s device to a local network.

These networks are all connected, but if a person wants to get information from overseas the traffic must be carried over a submarine cable (or in rare cases, a satellite connection).

The following infographic shows how internet traffic from a local device reaches an international server.

SA Internet networks in practice
SA Internet networks in practice


What Does a Submarine Cable Look Like?

Many people expect a submarine cable system which carries lots of South Africa’s Internet traffic to be a rather large cable. Not so.

It is a surprisingly thin cable, which houses very thin fibre-optic strands which are used to carry data.

Submarine Cable
Submarine Cable


How Undersea Cables are Laid

Specialised ships and equipment are used to lay submarine cables, which is described in the video below.

Short History of South Africa’s Submarine Cable Systems

The Internet started to enjoy widespread adoption in South Africa in the early nineties. Over the years the country’s international cable infrastructure grow to accommodate this growth.

South Africa is currently connected to the rest of the world through five submarine cables – WACS, Seacom, SAT-3, SAFE, and EASSy – offering multiple terabits of bandwidth.

This was not always the case. From 1993 to 2002 South Africa was only served through the SAT-2 submarine cable.

SAT-3/SAFE was launched in 2002, and this was the monopoly cable system until July 2009 when Seacom became operational.

Seacom’s launch was followed by EASSy and WACS, which created a situation where South Africa went from an international bandwidth starved country to having more than enough capacity.

1993: SAT-2 Submarine Cable

The 9,500 km SAT-2 submarine fibre optic cable was launched in March 1993, and linked South Africa with Europe. It offered a peak capacity of 560 Mbps, and was run by Telkom in South Africa. It was decommissioned in January 2013.

Sat 2
Sat 2


2002: SAT-3/SAFE

The SAT-3/SAFE submarine cable system started to offer services in 2002. SAT-3 connects South Africa with Europe on the West Coast of Africa, while SAFE provides redundancy on the East Coast by connecting the country to Malaysia.

When SAT-3/SAFE was launched in 2002 it offered a capacity of 20Gbps. Over the years many upgrades took place, and it currently offers hundreds of gigabits per second.

SAT-3 SAFE (from Telkom)
SAT-3 SAFE (from Telkom)


2009: Seacom

Seacom was launched in July 2009, providing the only competition to Telkom’s SAT-3/SAFE at the time. The 15,000km cable system runs on the East Coast of Africa, and connects South Africa to London.

Seacom launched with design capacity of 1.28Tbps, and increased its capacity to 12Tbps in May 2014.

Seacom (from Telkom)
Seacom (from Telkom)


2010: EASSy

The Eastern African Submarine Cable System, better known as EASSy, went live in July 2010. The 10,000km EASSy cable system connects South Africa to Sudan.

It initially offered a capacity of 1.4Tbps, but in 2014 the EASSy cable system will be upgraded to 10Tbps.

EASSy (from Telkom)
EASSy (from Telkom)


2012: WACS

The West Africa Cable System (WACS) was launched in May 2012 with a design capacity of 5.12Tbps and providing the country with another submarine cable system on the West Coast of Africa.

The 17,200km WACS fibre optic submarine cable system spans the west coast of Africa, starting at Yzerfontein near Cape Town, South Africa and terminating in the United Kingdom.

WACS (from Telkom)
WACS (from Telkom)


All The Cable Systems Working Together

Most South African telecommunications operators and Internet Service Providers (ISPs) have capacity on multiple cables for redundancy.

The following cable map, provided by Steve Song’s Many Possibilities website, provides an overview of the different cable systems and their relative capacities.

Telecoms Cost Information

 POTENTIAL INTERNET COSTINGS OPERATING OUT OF SOUTH AFRICA

costing-table

Wi-Band Brochure
Wi-Band Pricing

Telecommunication costs are based on a number of factors and may changed depending on the service provider. View our list of service providers.

The above information has been supplied by Internet Solutions.

Property Overview

Office Grading

 Offices in South Africa are generally referenced as either “AAA” or “Premium” grade (Class A), “A” grade (Class B), “B” Grade and “C” Grade (Class C).

These can (currently) be explained as follows:

AAA or Premium Grade (Class A)
Rentals between R140 – R200/m2 p/m
A Grade (Class B)
Rentals between R90 – R140/m2 p/m
B Grade (Class C)
Rentals between R50 – R90/m2 p/m

Additional Cost Information

 Escalation on Rentals
Range is between 8% and 9% per annum compounded

Guide to Electricity Costs
R15 to R20 metre squared, per month based on normal working hours

Guide to Parking Costs
Parking bays R900 – R1300 per month in Cape Town CDB

These costs only provide a guideline on property costings in Cape Town. For more information contact the companies below:

Baker Street – Rental Costs
Maxigroup – Rental Costs

Additional information to follow shortly on KwaZulu-Natal and Gauteng.

Useful Documents

2016 Key Indicator Report

South African BPO Value Proposition

2015 Key Indicator Report

Immigration Regulations

South African Economic Landscape

Analysis of South Africa as a BPO Delivery Location

Videos