Telecoms group Spescom may have seriously underwhelmed the market in the past, but there are growing signs that it is turning itself around, say analysts Frost & Sullivan.
While the operator’s annual results showed a drop in revenue of 6% from last year, it grew its operating profit to R14,4-million from R1,3-million in 2007. The group also increased its operating margin to 4%.
“Following years of poor performance, Spescom is continuing its turnaround, “says Frost & Sullivan analyst, Spiwe Chireka. “Expansion of its services and addressable markets to include more offshore clients, and preparation by companies for the nearing Confederations Cup and 2010 are the key areas for growth.”
The contact centre operations through Spescom DataFusion, in particular, are expected to continue showing growth. This market is in a high growth phase and with Spescom having established itself as a key player, it is expected to reap significant rewards.
Chireka believes that Spescom’s strategy to expand its managed and hosted services in this area will play a particularly important role in securing future growth. The current difficult economic times mean that these services will become increasingly popular.
“It is likely that investment into inhouse contact centres will become increasingly difficult to justify and this will see more companies outsourcing their operations,” Chireka says. “Operators in the US and other developed markets are also expected to increasingly consider offshore contact centre services in an effort to manage costs. South Africa is becoming an attractive offshore contact centre and BPO destination.”
Spescom’s partnerships with leading brands such as Avaya and Sony will continue to be important to the company as it looks to secure its reputation. Avaya is a global market leader in contact centre solutions, and Spescom’s standing as a local distributor is boosted by this association. Avaya also recently presented the company with the 2008 Avaya Business Partner of the Year award.
Chireka adds that Spescom’s own voice recording solutions should not be discounted, though. The company’s innovative Libra solution for recording mobile conversations – the first of its kind in the world – will give Spescom DataVoice first mover advantage in the market.
“The growing use of mobile telephone services by consumers, coupled with new regulation such as that which requires that all calls in the financial services industry be recorded, is expected to drive growth for the operator,” Chireka says. “Spescom must aggressively market and patent this technology to ensure that it maintains leadership.”
Frost & Sullivan also believes that Spescom’s expansion into the rest of Africa is inevitable, as it presents such huge growth potential for the company. This is, however, only likely to happen in three to five year’s time.
“It makes business sense for Spescom to keep expansion opportunities in the rest of the continent at the back of its mind,” Chireka says. “Governments in Nigeria, Senegal and Kenya are aggressively driving the development of BPO, including contact centres, and Spescom should be prepared to take advantage of this growing sector. Frost & Sullivan expects the Kenyan and Nigerian markets to start becoming key contenders in the continent’s BPO sector from 2010 onwards, giving Spescom enough time to get its house in order and take advantage of this future growth.”