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Photos: Egypt follows Bangalore's offshore lead

Inside the heart of Egypt's high-tech transformation...
By Andy McCue, Contributor on
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1 of 4 Andy McCue/ZDNET

Inside the heart of Egypt's high-tech transformation...

Ancient Pharaohs and pyramids may be what Egypt is most famous for but the country is now making a charge to become the next high-tech offshore outsourcing hotspot for European and US multinationals looking for cheaper call centre and IT locations.

The country aims to compete with near-shore eastern European and far-shore southeast Asian destinations but will also have to fend off stiff competition from the likes of South Africa and closer neighbours such as Morocco which are also gearing up to try and grab a piece of the lucrative offshore outsourcing market.

AT Kearney already ranks Egypt as the 12th hottest place for offshore outsourcing and analyst Datamonitor predicts the country's currently tiny share of the market will grow by 52 per cent this year alone.

Photo: Andy McCue

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2 of 4 Andy McCue/ZDNET

At the heart of Egypt's offshore push is a new "Smart Village" on the outskirts of Cairo that is home to some of the country's leading high-tech and call centre companies such as Xceed. Microsoft also has a campus building here as does the Egyptian ministry of ICT.

As with Bangalore in India, the ultra-modern Smart Village is a world away from the Cairo that most Egyptians are familiar with and workers are bussed in for their shifts in the call centres from locations around the city.

The gradual privatisation of telecoms in Egypt has given operations like this the ability to compete in the international market. Xceed has grown from zero staff to 1,000 in just two years and is predicting to reach a headcount of 1,400 by the end of this year.

Photo: Andy McCue

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3 of 4 Andy McCue/ZDNET

With the average Egyptian earning just over £1.50 per day it is no surprise that the country's 250,000 graduates are jumping at the chance of working in call centres where salaries for those with foreign language skills are around £200 to £250 per month.

Here at the Xceed call centre they receive 18,000 applications per vacant position and riot police were needed to control the crowds at a recent recruitment day.

The strong tradition of foreign language schools in Egypt puts the country in a good position to support English-speaking and European customers, while call centre staff are also given weekly newsletters and the latest DVD movies for the country account they are working on.

Adel Danish, chairman and CEO of Xceed, told silicon.com: "Egypt can be for Europe what India is to the US."

Photo: Andy McCue

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4 of 4 Andy McCue/ZDNET

But Egypt also faces internal challenges in building up its own modern physical and IT infrastructure along with the high-tech skills required for the country to be taken seriously as an offshore outsourcing destination.

On the physical infrastructure side there are more Smart Villages planned but travelling through the congestion in Cairo itself is still a painfully time-consuming exercise.

On the high-tech side, access to computers and the internet is beyond a huge proportion of Egypt's 70 million-strong population and there are still only 100,000 broadband subscriptions - most at 256k - on a rollout that began almost three years ago.

But the government is trying to address the situation by providing subsidised training for people to gain certified IT skills from vendors such as Microsoft and Oracle, while the Information Technology Industry Development Association (Itida) is subsidising 85 per cent of the cost for companies to gain the CMM software development quality accreditations that India has set the benchmark in.

Mohammed Omran, CEO of Itida, told silicon.com: "One of the key challenges is for Egypt to develop our own expertise in order to be able to compete with the world's outsourcing companies... and compete against India, Ireland and eastern Europe."

Photo: Andy McCue

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