Outsourcers flee revolutionary Egypt
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Vodafone moves call centre work out of Egypt, while Indian firms Infosys and Wipro evacuate staff
Outsourcing companies are moving work and staff out of Egypt as the civil uprising and the government’s retaliatory communications blackout make operations untenable.
Vodafone International Services, a division of Vodafone Egypt that provides call centre services to the mobile telecommunications conglomerate and some third party customers, has had to move work out of Cairo’s Smart City technology and BPO park to its UK facilities, union sources told Information Age yesterday.
Vodafone is the flagship customer of Egypt’s nascent outsourcing sector. It launched operations there in 2007, and has since expanded while making redundancies in countries including the UK.
The company’s Egyptian division is a joint venture with Telecom Egypt, the state-owned national operator. Last Friday, Vodafone Egypt was forced to cut mobile voice and data services under instruction by the government. “Under Egyptian legislation the authorities have the right to issue such an order and we are obliged to comply with it”, it said in a statement.
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Vodafone declined Information Age’s invitation to comment.
Indian IT outsourcers Infosys and Wipro, meanwhile, have evacuated expatriot staff from their Egyptian facilities, according to a report in the Wall Street Journal. “We are closely monitoring the situation in Egypt, and have taken steps to ensure the safety of our employees," said Wipro in a statement.
Egypt has invested signifiacntly in its outsourcing sector, building the Smart City facility outside Cairo to attract technology companies and lobbying heavily through its development agency ITIDA.
When Information Age profiled Egypt’s viability as an outsourcing destination in 2009, Economist Intelligent Unit analyst Ania Thiemann identified growing resentment towards President Hosni Mubarak’s entrenchment as a primary risk factor.
“We think that the presidency will somehow transfer to his son,” she said at the time. “It will happen through constitutional means, but the question is how people will react to what is in essence hereditary transfer of power.”
Your attempt to claim some foresight for the present problems in Egypt is completely inappropiate. Your previous article argued the opposite. Your analyst stated that the new government had overcome corruption and that the problems were largely only of western perception.
Furthermore, you argued that 'authoritarian' meant stability which was an asset for outsourcing. In other words, you virtually endorsed the dictatorship as a great place for business.
To quote your original article:
“Ania Thiemann, senior Egypt analyst at the Economist Intelligence Unit, argues that perceptions of the country as a hotbed of corruption may be outdated.
“The previous government that was in power until 2004 did have a very poor record [on corruption]; the laws were in place but the implementation was appalling,” she says. “But the new government has completely turned it around; they’ve opened Egypt for business.”
…
"A characteristic that impairs global perceptions of Egypt is the seeming permanence of its leaders and an absence of genuine democracy: in its Democracy Index for 2008, the EIU ranks the country as an authoritarian regime. But for organisations looking for countries in which to make multimillion-dollar IT and BPO investments, stability is an asset."
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