Johannesburg — PLANS to make SA the hub from which foreign companies run their call centres and business process outsourcing activities are under threat from near neighbour Mauritius, as the island enters the industry as a rival destination.

Mauritius is hosting numerous foreign companies at a conference this week to try to win deals and investments that may otherwise head to SA.

The Data Centre Strategies conference is being staged by the Board of Investment of Mauritius, with delegates coming from Africa, France, India and the UK.

Mauritius aims to establish itself as an international centre for data back-up, disaster recovery and business continuity services for large companies anywhere in the world. SA's Department of Trade and Industry has a similar policy, but the high cost of telecommunications and potential shifts in the political stance towards private enterprises are hindering that goal.

Erratic electricity supplies, xenophobic attacks highlighting a lack of harmony, tough labour laws and the frustration of extracting work permits from the Department of Home Affairs may also see SA lose to Mauritius when foreign companies choose an offshore base for their business processes.

The lack of success for SA's bid to become a top international contender was obvious in July when Mumbai-based Aegis bought out SA's call centre operator, CCN. CCN, like some of its rivals, had struggled to win foreign deals as it was too small and inexperienced to be trusted by large global firms.

SA's Department of Trade and Industry set an ambitious goal of creating 100000 jobs in the sector, but has achieved just 17552 so far. Its business process outsourcing director, Pumela Salela, defended that by arguing that the aim was to create 25000 direct jobs, triggering another 75000 indirect jobs to reach 100000 overall. Even so, it is still dismally off target.

Mauritius, in contrast, had adopted bold reforms to significantly improve its business climate, Information and Communication Technology Minister Asraf Dulull told Business Day.

Mauritius could compete against SA as it was known for its ability to successfully compete, adapt, evolve and innovate, he said. "There are no threats to our chances of winning international contracts. Mauritius is recognised as a vibrant, robust and politically stable economy, welcoming investors, self-employed entrepreneurs and professionals with talents and skills to do business in all economic sectors.

"Our people have a wellbalanced culture coming from many parts of the world and live in harmony."

It had a good regulatory framework and data protection laws, and reliable power supplies with stable and affordable electricity, he said.

Its low-cost base meant multinationals were increasingly using Mauritius for their offsite data centres and disaster recovery services, and more South African companies were also looking at relocating those activities to Mauritius, Dulull said.

Asked why SA's rival efforts to promote itself as a preferred offshore location were having little effect, the minister said such an initiative needed joint public and private co-operation with top-level support.

It also needed continuous government efforts to improve the business environment and the eco-system in terms of data protection acts and flexible labour laws.

The campaign to promote Mauritius had focused on targeting trade missions and conferences rather than running road shows. "We have been going directly to companies in different countries and presenting Mauritius as an interesting place to invest in," he said.

The conference this week would boost that by showing visiting multinationals what the investment opportunities were.

The island has been honing its infrastructure for years and was the first African country to launch a third-generation cellular network to carry high-speed data, well ahead of SA.

It also has undersea telecoms cables providing direct connectivity to the rest of the world.

Other incentives are tax rates of 15%, no exchange controls and the free repatriation of profits.