Business Process Outsourcing firms have been eyeing Kenya’s connection to the undersea fibre optic cables for new vast business opportunities. The undersea fibre optic cables made its debut in the costal city of Kenya –Mombasa in June 2009. The $82 million submarine fibre optic cable links the Mombasa coast with Fujairah in the United Arab Emirates. It has an initial capacity of 40 Gbit per second which can be upgraded to 640 Gbit per second. Some of these BPOs have already registered reports of increased inquiries from both local and international clients wishing to outsource their work to third parties.
“We have seen a rise in inquiries by about 90% since connecting to the undersea cable, in the last 3 months we have had 4 of these clients” says Munjal Shah a director at Ken-tech data limited. He added that clients are now seeking to get good quality offered by the fibre optic in comparison to the satellite connections which normally has lots of latency that often affects voice quality.
The fibre-optic connection enables faster voice transfer unlike satellite, which has an average response time of 650 milliseconds, thus introducing some delays in our voice communication. The presence of the fibre connection will reduce this to an average of 90 milliseconds for calls between Europe and eastern Africa, and an even faster response of less than 6 milliseconds between Dar es Salaam and Mombasa.
The presence of the undersea fibre optic cables has really been a relief for BPOs in Kenya. Ken-techdata for instance has invested over $700,000 for a 150 seat facility and before the fibre connection it was paying $3000 for satellite connection per megabyte a month compared to the current $600 for the same capacity for fibre connection, the difference is remarkable.
BPOs are now calling on the East African governments to implement a tax structure that’ll give them a competitive edge in the region, they claim that the tax regimes in the nations’ are not friendly to the players in this sector thus leaving the local firms sidelined. This has made foreign companies to thrive since they enjoy tax incentives from their host countries.
This appeal was lodged a few months after the results of a study funded by the Canadian International Development Research Council depicted Kenya to being way behind compared to other BPO destinations like India, South Africa, Ghana and Mauritius.