| Tue 18 Jul 2006, 10:14 | | DIALOGUE GROUP IN R150 BILLION GLOBAL CALL CENTRE |
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JOINT RELEASE
DIALOGUE GROUP HOLDINGS LIMITED AND THE JSE LIMITED (ALTX)
ALTX NEWCOMER DIALOGUE GROUP IN R150 BILLION GLOBAL CALL CENTRE MARKET
As SA's largest privately-owned, independent call centre operator Dialogue Group ("Dialogue") has secured a significant foothold in the outsourcing and offshore call centre market, globally estimated to be worth up to R150 billion. The second largest group of its kind in SA, Dialogue became the first local operator to win an international offshore contract in 2002 and is well positioned to capitalise on increasing offshoring in light of SA's cost advantage, technology and cultural affiliation with the UK and USA. Dialogue is set to debut on AltX in September 2006.
Group CEO Jason Drew attributes the group's exponential growth over the past three years to a combination of factors. "Local companies are increasingly outsourcing their call centre function to cut overheads and focus on core business, while international players are seeking lower cost destinations such as SA that nonetheless offer a quality service." The group's future income model is intended to be split as to 60% from SA outsourcing and the balance of 40% from international contracts (offshoring).
Highlighting future growth opportunities Drew says that Dialogue is SA's second largest operator after Dimension Data's Merchants, and that to date, only 2% of SA companies' inhouse call centres has been outsourced. "Based on current research, should Dialogue win only one of every 20 future contracts for which it tenders, this could represent R450 million turnover annually." His confidence in Dialogue's ability to achieve this is founded on their track record. "We have won the majority of large contracts and tenders in the country to date, most notably the latest tender for a major portion of the MTN call centre business - one of the largest outsource deals in SA by value."
He is confident that the group's 'BBB' EmpowerDex rating will prove a solid competitive advantage in securing further local clients. A large percentage of Dialogue's workforce and 80% of operational management come from previously disadvantaged backgrounds. In addition the group presently has a working relationship with black-owned Tlhalefang Placements, which is a 40% shareholder in group subsidiary Interaction Call Centres. Drew says that the group will look to enhance its BEE credentials. "Formalising a BEE ownership deal at group level remains a strategic imperative." He points out that an enhanced profile afforded by a listing on Altx should help to attract further BEE participation.
With regard to offshoring he explains that Dialogue has seen growing resistance amongst its UK and US clients to the Indian accent and cultural divergence from the West, compounded by a lack of new human capital in the Phillipines. He adds that the falling cost of telecoms in SA, anticipated to drop further with a second network operator, "should enable Dialogue to compete effectively on cost and entrench SA as an offshoring destination of choice."
Drew says that the listing is a natural progression in the group's development. "The capital raised will go towards organic growth through funding a further site and towards acquisitions to accommodate rising demand." Acquisitions currently on the cards include the buy-out of a client site in Johannesburg with a total capacity for 1000 new agents. He points out that the new site and acquisition will more than double Dialogue's current agent capacity and boost the management team, achieving a key strategic objective of the group.
"With Dialogue playing an increasing role in businesses of large clients who are mostly listed, it is necessary to leverage the greater level of credibility, transparency and trust from becoming listed ourselves," he adds.
Dialogue's accelerated growth post listing will benefit not only its own employees but also further stimulate employment. "The group employs a large number of first-time entrants to the industry," says Drew. Recent surveys have highlighted this sector as the fastest growing by virtue of employment, with the Western Cape for instance reflecting 74% growth in employment in the last two years. Drew believes that Dialogue's approach to employment and investment in skills development is effective, with 12% staff attrition well below international industry norms.
Noah Greenhill, GM for marketing and business development for the JSE and Altx, says that he is confident of Dialogue's prospects and its inclusion on Altx: "Dialogue presented to the committee one of the most comprehensive and promising business plans we have reviewed. We look forward to their joining Altx in light of their achievements to date and strong growth prospects enhanced by favourable SA economic conditions."
Ends.
Issued by: Envisage Communications
Nicole Sacks
(011) 325 5944 / 083 287 2771
nsacks@envisagesa.co.za
On behalf of: Dialogue Group
Marc Spendlove, International Marketing Director
021 409 3700 / 083 700 52 53
marc.Spendlove@dialogue-group.com
Issue date: 18 July 2006
www.dialogue-group.com
FYI: The Dialogue Group
Dialogue offers a comprehensive call centre service ranging from onsite management of in-house SA client centres to full outsourcing including offshoring (call centre services to UK- and US-based clients). Since 2003 it has grown from a start-up into a group employing over 1 000 call centre agents, and in early 2005 was appointed to partner with TSC - one of the largest UK outsourcers - and TransWorks India in a seamless call centre offering across the three continents.
Services are provided in seven European languages and six African languages. The group's three fully-resourced facilities are located in Johannesburg, Cape Town and Durban and cater to SA clients including ABSA, MTN, Standard Bank, Edcon, McCarthy Call-a-Car and Cape Gateway. International clients include UK-based e-media and Admiral Group.
