Outsourcers flee revolutionary Egypt

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.

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.”

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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