Bangladesh: the next name in outsourcing
Ahmadul Hoq, president of Bangladesh Call Centre and Outsourcing (BACCO), the industry body representing contact centre and business process outsourcing (BPO), speaks to The Daily Star on business opportunities for the call centre industry in Bangladesh. He works with the government and private sector to create strategies for the country to ensure that Bangladesh is the “next” destination of choice for outsourcing and offshoring.
How did you get involved with this business?
At first, I was involved in setting up a call centre in India. India is doing good business. In 2006, I tried to get permission from Bangladesh Telecommunication Regulatory Commission (BTRC) for voice over internet protocol (VoIP) operations, as my target was to set up a back office here in Dhaka. But the BTRC laughed it off. After a year, the BTRC published the call centre guideline. I worked on the formation of the guidelines.
What are you doing now?
I have a company called Virgo. It is an ISO standard company with 90 seats, and half of them are in use. Of course, we are working on voice services, but we are also doing virtual assistance, software development and content development. We plan to start a big venture soon.
Tell me more about the venture.
The new venture will be a global BPO company. I hope it will be able to create employment for 10 thousand graduates in the next five years. We will provide $100 million in salaries to our employees. When the backup fibre cable will be set up, a lot of work will be created for Bangladesh.
What is about the difference in terms of wage costs between the countries?
The cost of wages is far higher in the developed world than in Bangladesh. It is, on an average, $30 an hour in the European countries. It is even more in the US. India is paying $20 and the Philippines, $10 to $15. But it is still $8 in Bangladesh. So we are in an advantageous position, which is the most important asset for us. A $470 billion work opportunity in the US is waiting for us. It currently outsources 30 percent, while almost half of it can be offshored. Huge opportunities await us.
Which countries are in the call centre market?
Of course, India and the Philippines are the pioneers. South Africa, Indonesia, Sri Lanka, and Kenya are also in the business. Even Bhutan is working on it. The heads of state of India and the Philippines have prioritised the issue. They took 15 years to reach this situation. If we can do the same, we will also be able to capitalise on the opportunities. We need to form a committee that will report to the prime minister on the issue.
What is the scale of investment required to form a call centre nowadays?
If you want to set up a call centre of 30 seats, then you will have to invest at least Tk 1 crore. A large space is also required, which is very expensive in Dhaka. Telecommunication costs are not competitive, compared to other countries. But the problem is that we do not have trained people. The university students are not ready at all. So you will need to train them for about six months and training costs are also very high.
Revenue sharing with the government is now 0.5 percent but it should be eliminated for at least 10 years. Big businessmen should come to the sector with big investments. We have learnt how to get the business and the technicalities. None will come to us; we will have to go to them. So investment is also needed on the branding side and this is where the government should concentrate on.
Did you face any problems in receiving payment for work done?
A majority of the call centres in the country are facing this problem. Recently, a company did not receive payment worth Tk 14 lakh. The main company did not pay the money. We have no scope to file a case with the courts as laws differ from country to country. So, some local companies are setting up offices in the European markets to get the legal facilities of those countries.
What are your predictions about this sector?
It will not be impossible to deploy half a million people in the sector within the next five to seven years. Before acquiring international services, we need to unlock our home back offices. If the banks come across to offshore their back offices, it will help us obtain international contracts. We believe over 150,000 direct and 37,500 indirect jobs will be created within the next 10 years. It will be possible to earn at least $2 billion a year in foreign exchange.