Western Cape BPO sector witnesses impressive expansion in commercial real estate
In the bustling city of Cape Town, the Business Process Outsourcing (BPO) sector is experiencing significant growth, with over 11,000 new jobs projected this year alone. However, the traditional CBD is nearing peak capacity, and its office towers are not suitable for call centres due to their small size. As a result, BPO operators are looking beyond the CBD, setting up shop in areas like Century City, Salt River, Wynberg/Claremont, and even townships.
However, the expansion of call centers in townships faces significant challenges. One of the most pressing issues is infrastructure. Townships often suffer from poor road quality, unreliable internet connectivity, and limited broadband access. Digital infrastructure inequality is profound, with many low-income and informal areas having unstable broadband and frequent service outages.
Another challenge is commercial risk. The township economies are often underestimated, and decision delays or over-analysis can hinder business adaptability. There's also the risk surrounding long-term infrastructure investment versus short-term contractual commitments typical in tech sectors.
Employee needs and usability present another hurdle. Workforce digital literacy is limited in townships, compounded by language barriers and interface design challenges. Employee transport links are often inadequate, limiting access to jobs. Additionally, there can be unmet needs related to stable utilities (electricity and water), affecting workspace reliability.
Despite these challenges, there are emerging solutions addressing these issues. Digital connectivity initiatives like the Kayamandi Fibre Project provide affordable high-speed fiber internet, improving operational stability for call centers. Local and youth-driven entrepreneurship is also proving successful, demonstrating that small businesses can successfully partner with global firms, creating jobs and showing local economic potential.
Strategic location and facility growth are also crucial. Call centers benefit from proximity to commercial facilities, which is becoming more critical as US operators expand into South Africa. This calls for locating call centers near developed hubs or reliable infrastructure nodes.
Infrastructure investment models also play a key role. Careful planning is needed for sustainable utility usage (power, water) to avoid overburdening local services. This might inform risk assessment and necessary infrastructure upgrades in townships.
In summary, the main obstacles for call center expansion in South African townships are poor infrastructure, commercial uncertainty, and workforce readiness. However, these are being mitigated through targeted fiber projects, entrepreneurial agility, strategic facility placement, and sustainable infrastructure planning. Such holistic approaches can unlock township economic potential and support scalable, inclusive call center growth.
Notable examples of call center expansions in townships include Wipro's setup in Century City in 2023, Sourcefit's opening in De Waterkant in March 2024, and Sigma Connected's call center in Paarl, which created 250 jobs in the first phase and aims to grow to around 1,000 roles in the coming years. Despite these successes, it is clear that more needs to be done to overcome the challenges and fully realise the potential of townships as call center hubs.
- The expansion of call centers in townships necessitates significant investment in digital infrastructure, as the quality of roads, internet connectivity, and broadband access often falls short compared to more developed areas.
- Addressing employee needs and usability is essential for the success of call centers in townships, particularly in regards to digital literacy, language barriers, transportation, and workplace utility reliability.
- Sustainable infrastructure planning, such as strategic location, facility growth, and utility usage management, can help mitigate risks associated with long-term investment and unlock the economic potential of townships as scalable and inclusive call center hubs.