Just four years on after decades of conflict, South Sudan’s economy is still nascent and officials from the region — desperately under-developed when compared to neighboring Kenya and Uganda — have struggled to attract foreign investment.

But mobile telecommunications have steamed ahead and the past year has seen hundreds of new towers erected across some of the swampiest parts of the south. Two companies, MTN and one of the world’s biggest operators, Kuwait-based Zain, have opened for business this year. Since Zain’s launch in April, the company has left all other operators behind in tower-construction, telecommunication ministry officials say.

Zain’s CEO, Khaled Mutahdi, said the company planned to spend up to $150 million in the region. MTN have also embarked on rolling out from main towns to smaller population areas. Although only a miniscule number of offices have working land lines, most of Juba’s civil servants, businessmen and politicians move about town with between two and four phones at all times. Not one of them has reception all of the time. After four-wheel drives, mobiles are easily the number one peacetime accessory. But despite the gadget-obsessed passion for mobile telephones, operators are racing to provide improved services to survive in an environment of increased competition. A new player will enter the market shortly in the form of Vivacell.

“The launch will be very soon,” said Joe Audi, the company’s marketing manager in Juba. Audi was unable to provide details of the total value of the investment. Vivacell is essentially a re-branded Network of the World (NOW), one of two South Sudanese companies that emerged out of the region’s 21-year insurgency. In 2007, senior officials in the south’s telecommunications ministry said NOW was at least partly owned by the Government of Southern Sudan (GoSS) and that they were trying to find a buyer to take over the license. More recently they have said the ministry had nothing to do with the sale. Part of the company is still owned by southerners, Audi said.

“Vivacell has operations in Armenia, but those are now partially owned by Russia’s MTS operator,” Audi added. Vivacell-MTS has 1.7 million Armenian customers according to the company’s website. New Ericsson equipment has since been installed with initial plans to cover four of the South’s larger towns of Juba, Yei, Bor and Torit. The company will begin by selling SIM cards, but will also eventually provide GPRS systems that will mean customers can access the Internet on the move. “We’ll start with prepaid services through a distributor,” Audi explained, adding that tens of towers would be installed by the end of this year and eventually Vivacell will have at least 100 employees running the GSM system.

Who’s ringing in?

NOW has been little more than a name since members of the south’s rebel movement established it during the war. During peace negotiations both Khartoum and the rebel Sudan People’s Liberation Army/Movement (SPLA/M) had to bring all existing telecommunication contracts to the table. Khartoum presented Areeba (now MTN), Canatel, Sudatel (now Sudani) and Mobitel (now Zain). The southern rebels got Gemtel and NOW recognized. All companies have until 2010 before either side can sign any new contracts.

Ambiguity in the peace accord over whether or not Gemtel and NOW would be allowed to work in south Sudan led to many months of disagreement between Khartoum’s telecommunication ministry and Juba. A 2007 memorandum between north and south Sudan re-established the right of the four northern companies to spread across the south, but did not return the favor to the two southern companies, which must stay south of the border. Northern companies were given access to start building or re-building their operations in the south. In return the southern government was allowed to build and run its own gateway. The gateway contract was won by Ericsson and will be completed early next year at the cost of $17 million, said Stephen Juma from the south’s Ministry of Telecommunications and Postal Services.

With the new gateway, the south will be able to monitor calls made in the south and make money directly from operators who use it. All operators interviewed said that they have agreed to use the separate southern gateway for southern calls. This will also drive down prices from government-owned Gemtel, which still uses a gateway in Uganda as opposed to Khartoum. Southern politicians did not want Sudan’s capital to be able to control calls. In order to place a call to any one of roughly 20,000 Gemtel users from another operator in Sudan, one must wait while a Hong Kong satellite beams the call back via Uganda, explained Gemtel manager Sam Mitwe. Uganda also charges South Sudan’s government $50,000 a month for the gateway usage. As a result, phone calls are enormously expensive and 2008 saw many subscribers switch over to MTN and Zain in order to save money.

“When we get the gateway, our dialing code will change to +249 and prices will go down drastically,” Mitwe said. Gemtel SIM cards are just $22. But unlike Zain, this year’s other newcomer MTN, does not offer a deal in which to purchase a telephone as well. MTN’s Kenyi Ali, head of sales in the south, said the company has distributed SIM card packs across Juba as well. The bright yellow boxes are noticeable in many small, tin shacks, which also sell beverages and daily necessities. Zain, on the other hand, registers all users in its Juba office. Both new customer care officers are busy for most of the day with new subscribers. Most lines in Juba are still not operating at 100 percent. Operators have blamed this on undisciplined use of the spectrum, with some operators barging into others’ sections and causing interference.

A tough call to make

Whatever the reason for the poor line quality in the South, people with enough cash try and increase their chances of getting through by keeping two or three mobiles on them at all times. Sudani, Zain and MTN offer a handset (Samsung for Sudani, Nokia for Zain and Huawei for MTN), as well as a SIM card, for less than $45. South Africa FIFA sponsor MTN, which started work in the south in April, has also introduced three tariff plans.

Ali said that MTN had already begun raising its profile in the south, sponsoring cultural and other events. Like Zain, Gemtel and Sudani, MTN towers cover most of the south’s big towns already and, like other operators, they are expecting to enter more rural areas this year. Up to 30 MTN towers are already up across the south, with six out of a planned eight in Juba itself. MTN has provided a cheaper service to the numerous southerners who have families and friends in neighboring East Africa, where millions of southern refugees fled during the war and where the company already has a good customer base.

In 2007 the company recorded over 44 million users in 21 countries, according to its website. MTN-to-MTN callers get a 50 percent discount on international calls to Uganda, Kenya, Tanzania and Rwanda. The largest proportion of Gemtel’s clients are in the south end of South Sudan. Many of those have relatives and work in next-door Uganda and Kenya. In the northern parts of the region, mobile phone users tend to have closer connections in Khartoum.

Mitwe said the company is also introducing new technology to try and keep its customers from joining the new companies. Heavy rains or even strong sunlight sometimes affects the satellite technology used to transmit calls across the region. Hence, a more reliable microwave link system, in which a series of towers transmits calls, is being built and several towns are already linked in this way. “We’re the first to do this,” Mitwe said.

Tunisia has joined the growing list of countries turning to nuclear energy to provide a dependable and secure source of power. Becoming a member of the select nuclear club follows signature of a 20-year cooperation agreement drawn up with France in mid-2008, during the visit of French President Nicholas Sarkozy to Tunisia. The agreement has also been given the go-ahead under the guarantee system operated by the International Atomic Energy Agency (IAEA).

Approval of the Franco-Tunisian deal means that Tunisia can develop nuclear energy for peaceful means. During a recent visit by a senior delegation of officials from the IAEA, a spokesman declared the agency’s willingness to help Tunisia build an electricity generating plant by 2020, as well as in assisting in training qualified personnel to manage it.

Production of electricity in Tunisia is increasingly dependent on natural gas as a primary source of fuel. The gas is pumped from the country’s own offshore installations, operated by BG and supplemented by royalties taken from the trans-continental pipeline that delivers Algerian gas from Hassi Rmel to Italy, which comes on shore at the island of Sicily. Although Tunisia is operating a successful energy management program, many feel that it is only a short-term solution and that over the long-term, an alternative source of energy that does not rely on ever-depleting national resources or foreign production is vital. Industry experts say the demand for electricity could almost double to 30 billion kilowatt hours by 2020. Nuclear energy would satisfy up to a quarter of additional demand.

The need for nuclear energy will also increase as Tunisia seeks to meet the growing demand for clean drinking water. A French study compared four nuclear power options with combined-cycle gas turbines and found that nuclear desalination costs were about half those of the gas plant for multiple effect distillation technology, and about one-third less for the reverse osmosis process. Small and medium-sized nuclear reactors are suitable for desalination, often with co-generation of electricity using low-pressure steam from the turbine and hot sea water fed from the final cooling system. The main opportunities for nuclear plants have been identified in the 80-100,000-cubic-meters-per-day and 200-500,000-cubic-meters-per-day ranges. In the meantime, 14 new standard desalination plants are to be built in southern Tunisia. Work has already started on three in the Tozeur area, which will have capacity of 6,000, 4,000 and 650 cubic meters per day, respectively. Total investment in the three projects will be about $13.3 million. The state water utility, Société Nationale d’Exploitation et de Distribution des Eaux (SONEDE), is preparing international tenders for the remaining 11 plants.

Energy for everything

For Tunisia, the production of nuclear energy would not only be a means to satisfy the ever-growing demand for electricity or to desalinate seawater for drinking purposes, but would also have applications in the fields of industry, agriculture and medicine. For France, signature of the agreement signifies yet another successful operation in the Maghreb, where it has already negotiated nuclear cooperation agreements with Algeria, Libya and Morocco. Morocco is expected to have nuclear power by 2016 and Algeria a couple of years later. A major producer and consumer of nuclear energy for its own national needs, France has also concluded agreements with Arab states in the Gulf region, many of which are looking to acquire nuclear technology for energy diversification, electricity needs and water desalination.

Under the joint Franco-Tunisian agreement, Tunisia’s state power and gas utility, Société Tunisienne de l’Electricité et du Gaz (STEG), will carry out technical and economic feasibility studies into the construction of a nuclear power plant, with a target date of  2020. STEG’s administrative affairs director, Mohamed Ben Ftima, said that although the program is only in is early stages, “STEG staff have already been sent to France to start basic training on nuclear programs.”

The cooperation program will also cover fundamental and applied research, safety and security regarding nuclear energy development and the valorization of uranium resources in Tunisia, the management of nuclear waste, legislation for a development framework and preparation of a public information program designed to alleviate scaremongering regarding the safety of nuclear energy.

Overseas outsourcing may have pricked a nerve among Western workers who fret about rising unemployment rates and the loss of jobs to foreign shores, but it has also helped drive economic growth into the double digits in countries like India and China. Emerging market economies like Morocco, identifying an opportunity to finally use “free trade” to their advantage, are making investment in outsourcing a pillar of economic development, hoping to pry a share of the sizable market away from the BRIC countries (Brazil, Russia, India and China).

Outsourcing to foreign countries allows companies to substantially reduce costs by paying less for qualified labor and in some cases receiving government subsidies. Pioneered by UK- and US-based businesses in the early 1990s, the practice of outsourcing is growing among French and Spanish-speaking markets, particularly in France, Spain, Belgium and Switzerland. As companies in Spanish and French-speaking countries keep increasing demand for outsourcing locations, Morocco is stepping up to the plate with investment in infrastructure and special zones to house outsourcing operations with a strong-willed bid to become the leading destination for Western European companies looking to outsource.

Morocco already has three natural advantages that make it a highly competitive outsourcing location for Western Europe: an inexpensive multilingual workforce, a modern liberalized telecoms sector, and a geographical and cultural proximity to Europe. The country also has dangerously high unemployment, prolific urban slums and a large group of unemployed graduates who regularly protest in front of the parliament in Rabat. A period of proven success hosting call centers showed the country could capably adapt to Western companies’ outsourcing needs, and Morocco seized on the opportunity to integrate outsourcing into its socio-economic development strategy.

The development of four outsourcing zones at Fes, Marrakech, Casablanca and Tetouan is generating a considerable buzz in the kingdom, raising hopes for economic growth and a viable way to absorb the growing numbers of jobless graduates. Although Morocco’s outsourcing sector is still at an early stage, a strong kickoff has gained it recognition as an up-and-comer on the international scene. In its 2008 year-end survey of the top 30 most suitable countries for outsourcing services, industry tracker Gartner dropped Northern Ireland, Sri Lanka, Turkey and Uruguay from the list and added Morocco, Egypt, Panama and Thailand.

The launch of the four zones, which will host business process outsourcing and information technology outsourcing (BPO and ITO), plays a key role in the implementation of the country’s “Emergence Program.” Engineered for the Moroccan government by the firm McKinsey, the Emergence Program outlines an overhaul of the country’s industrial sector over a 10-year horizon (2003-2013). As the country becomes a more attractive outsourcing destination, analysts predict rising levels of foreign investment and a boom in job creation. The strategy is expected to contribute $1.7 billion to the country’s GDP by 2013, and to create an estimated 91,000 new direct jobs and thousands more indirect jobs.

Positioned for success

Issam Belmaaza began working for Business Support Services (B2S) in 2005, providing technical support to clients of French Internet service providers Orange and SFR. After a five-week training session, he was hired at a $442 monthly salary. He has since been promoted, now earning $932 per month managing a team of recruiters. He works 8-hour shifts, five days a week, and is enrolled in a part-time Master’s program for management and human resources. He likes his job and his co-workers, and unlike some call center workers, who change from “Mohammed” to “Marc” during working hours, he does not lie about his name or strive to make his accent less pronounced.

His story is an uplifting look at what could be the future of the Moroccan workforce, should the execution of the Emergence Program go as planned. One of Morocco’s most serious problems is the growing number of jobless graduates. Reports indicate that Morocco will have to create as many as 400,000 jobs per year for the next 10 years to prevent mass unemployment. Mr. Belmaaza and others like him who find upward mobility in BPO or ITO will help the country’s middle class grow and narrow the gaping divide between rich and poor.

Furthermore, as outsourcing evolves from low-level manufacturing jobs to higher-level back office functions like accounting and IT development, workers will learn skills that carry over to local businesses. While Morocco’s outsourcing market has until recently been focused on call centers, new infrastructural investments will allow for expansion into banking, insurance, telecommunications and IT development. Knowledge process outsourcing (KPO) could also be in the future.

Special zones

The first outsourcing center to launch was Casanearshore, managed by the leading institutional investor CDG Group, which opened in 2007 as a park for BPO and ITO. The park, which represents an investment of $314 million, is spread out over 53 hectares. Upon completion of its three construction phases, it will consist of 40 buildings offering 250,000 square meters of office space. Currently, most of the companies with operations at the site are in the IT domain, although officials are implementing measures to attract more back-office functions. Tata consultancy services, Teuchos Groupe Safran and Ubisoft are among the businesses that have outsourced operations to the park, while BNP Paribas has set up two specialized IT companies on the premises: Mediha Informatique and BDSL.

High investor interest in Casanearshore has built anticipation for other outsourcing zones, in particular, the TangierMed outsourcing zone, run by the TangierMed Special Agency (TMSA). In Morocco, project management can be subject to lengthy delays and unforeseen constraints, but the TMSA’s efficient management of the TangierMed ports and free trade zones has won the agency widespread approval and confidence. On January 7, at a ceremony presided over by King Mohamed VI, the TMSA signed a convention to extend the TangierMed industrial platform to 5,000 hectares, including a 90-hectare site near Tetouan for outsourcing, scheduled to open in 2011. “We know that the outsourcing that will work in the North region will be the one that is destined to Spanish-speaking clients, so basically we will target companies in Spain in financial services and banking and so on,” said Youssef Bencheqroun, CEO of Activity and Real Estate Zones at the TMSA. The northern region of Morocco, including Tangiers at just 14 miles from Spain, is well positioned to tap into the neighboring Spanish market for outsourcing services.

One of the more useful legacies of the colonial period, when Spain controlled the northern territory of Morocco, was the spread of second and third languages throughout the country. Today, in addition to Arabic, most people in north Morocco speak fluent Spanish, while most of central and south Morocco speaks fluent French.  Outsourcing zones are coordinating location with linguistic proficiency. While the centrally located Casanearshore has made its mark on the French speaking markets, the opening of the TangierMed outsourcing zone in the north is expected to provide great opportunities to Spanish businesses, which have traveled as far as Latin America to outsource functions. Tangiershore will be the first site to offer Spanish companies a cost-effective Spanish-speaking workforce at a trifling geographic distance.

“We’ve had some contact on a one-to-one basis with some companies, and it looks like there will be a very strong interest,” said Bencheqroun. “I understand that the Spanish companies are already doing outsourcing with Latin America, but the advantage we would have is that, while outsourcing is fine, one day or another, people have to meet with each other and when that is in Latin America it’s a lot more difficult.”

Human resources & fiscal incentives

Infrastructural investments and the creation of special zones are essential in attracting outsourcing activity to Morocco. But the key to remaining competitive with other countries like Romania and Tunisia is training and building the potential of human resources. Prime Minister Abbas El Fassi, calling Morocco a “magnet” for companies interested in outsourcing, said that the sector was “at the heart of our interests, because it is bursting with development potential, due to the high demand which will come from European countries over the next 10 years,” local press reported. To prepare for this demand, a large-scale employee-training program is being implemented to ensure a ready supply of skilled workers. The state-funded initiative will train 22,000 graduates in 12 various fields.

The business-friendly Moroccan administration is helping to fuel investment by enticing companies with incentives, such as flexibility with the country’s work code and simplification of bureaucratic processes. Companies set up in the offshore zones will also benefit from exemption from corporate tax for the first five years and a limiting of the income tax for employees. As demand for outsourcing rises, competition among countries for offshore investment is stepping up, but Morocco looks well positioned to make good on its geographic advantages and human capital, complemented by extensive infrastructure and government support.

Outsourcing is bursting with potential, due to high demand expected from europe in the next 10 years