Mauritius as an Emerging Location for Delivery of Offshore Services

Transcription

Mauritius as an Emerging Location for
Delivery of Offshore Services
September 2009
Copyright © 2009, Everest Global, Inc.
Table of contents (page 1 of 2)
Topic
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Page no.
Executive summary
4
Section I: Perspectives on global sourcing
 Current state of play
 Growth opportunity and outlook
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10
15
Section II: A brief introduction to Mauritius
 Key facts about the Island nation and its economy
 ICT-sector – The Fifth pillar of the economy
19
20
23
Section III: Scope of current service delivery (IT-BPO) from Mauritius
 Overall market size and growth
 Key facts on current scope of services
 Case studies that illustrate scope and maturity of services
29
30
33
40
Section IV: Comparison of Mauritius with other offshore locations
 Costs
 Talent pool
 Structural factors and risks
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69
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Table of contents (page 2 of 2)
Topic
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Page no.
Section V: Implications for investors
 Roles that Mauritius can play for global investors and supporting rationale
Section VI: Appendix
 Research methodology and list of participants
 Glossary
 Acknowledgements and Authors
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103
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Executive summary (page 1 of 5)
A. Introduction and context
Mauritius is emerging as an important offshore destination for IT/BPO. The industry currently employs ~10,500 people and has
attracted a number of marquee global companies. Also, the industry has grown rapidly at a rate of ~45% per year.1
Mauritius is widely regarded as a relatively developed nation even though it is a part of the African continent. Its economy
registered a healthy GDP growth (in excess of 5%) in recent years. Further, Mauritius witnessed a significant uptick in its services
economy over the past decade. Though primarily driven by tourism, the services economy rapidly expanded into other sectors
including offshore financial services and IT/BPO. Mauritius has identified IT/BPO as a key pillar for its economic growth and has put
in place an ambitious vision for this sector. It targets to attract ~29,000 jobs by 2011 and also aspires to move towards “high valueadded” niches. Further, Mauritius has put in place several enabling initiatives to support the growth of the sector. These include
setting up infrastructure parks, talent development initiatives, and investor-friendly business policies.
This report presents a fact-based view of Mauritius’ current IT/BPO capabilities and highlights its key differentiators with respect to
other offshore destinations. The reports also outlines potential ways investors could leverage Mauritius in offshore delivery of
IT/BPO services. As a starting point, the report outlines the significant growth opportunity in offshore IT/BPO and the opportunity for
Mauritius to participate in this global sourcing phenomenon.
B. Global sourcing market: Opportunity and outlook
Global sourcing of services is a mature phenomenon, and the market represents US$90 billion in annual revenue across IT and
BPO services. Over the last 10 years, this industry grew exponentially to employ over four million people across 150+ locations .
While the industry is established, there remains significant untapped potential. Everest estimates put the addressable IT/BPO
market opportunity at ~US$1 trillion, roughly 10 times the current market size.
The sector is currently witnessing slower growth (5-15%), given the recent economic crisis. However, the medium to long-term
growth outlook is robust as firms will look to manage cost pressures by leveraging offshoring.
Further, as global firms expand their offshore footprint, they build global delivery networks. In doing so, they look beyond the
established offshore locations (e.g., India, Philippines). This presents opportunities for Mauritius to participate in an increasing
share of the global offshore market. Mauritius has established a good starting point, as described in the following section.
1 Compounded Annual Growth Rate between 2004-08
4
C. Scope of current IT/BPO service delivery from Mauritius
Exhibit 1
The report examines the scope of current IT/BPO service
delivery from the following perspectives: overall scale and
growth of operations, types of functions delivered, languages,
and client geographies served.
Offshore-experienced IT/BPO talent pool by country
2009; Number of employees in ‘000s
Poland
44-45
Morocco
31-32
Egypt
Overall scale and growth of operations
The IT/BPO industry in Mauritius currently employs ~10,500
people and has been growing at a rate of ~45% each year. A
number of leading global suppliers (e.g., Accenture, Ceridian,
Infosys) and offshore captives (e.g., Orange, DHL, Huawei)
established operations in Mauritius. Further, some leading local
suppliers (e.g., Rogers, Infinity BPO, Euro CRM) also built
credible presence in this sector.
The offshore market size in Mauritius is comparable to many of
its larger peer group countries, as indicated in Exhibit 1.
13-14
South Africa
9-10
Mauritius
9-10
Tunisia
7-8
Senegal
Has a large domestic market
of over 100,000 jobs
6-7
Jamaica
5-6
Kenya
0.8-0.9
Exhibit 2
Employee split by outsourcing services
2009; Number of employees
100% = 10,400
Types of functions served
Others1
The industry is successfully delivering a wide array of IT and
BPO services to offshore clients. The majority of the service
delivery (85%) is BPO focused, with a good mix of voice and
non-voice BPO services. Exhibit 2 illustrates the split of the
market across types of functions served.
KPO
9%
ITO
11%
Non-voice
BPO
4%
41% Contact center
35%
1 Include Multimedia, 3D/Graphic design, Engineering services, etc.
5
While there are some examples of relatively large centers
(~1000 FTEs), the typical scale of operations is between 100500 FTEs depending on functions served. Exhibit 3 provides a
view of the typical scale of current delivery centers and also
profiles the types of services delivered.
As shown in Exhibit 3, though most of the work delivered is
transactional in nature, Mauritius is starting to move up the
value chain with few instances of relatively higher-order work.
There are emerging examples of success in areas such as
customer surveys, reporting and compliance (F&A), and
business research.
Languages and client geographies served
Exhibit 3
Typical scale of
large providers
Typical processes delivered
Voice
(French and Englishlanguage call center)
400-500 FTEs

Non-voice
(Back-office BPO)
250-350 FTEs
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
100-150 FTEs
IT services
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Knowledge services
50-100 FTEs
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Mauritius has distinctive advantages in terms of its quality
bilingual skills in both French and English. Given these
strengths, Mauritius presents strong opportunities to serve
French-speaking markets (e.g., France, Africa, parts of
Canada) across both voice and non-voice functions. In addition,
companies can leverage Mauritius to serve English-speaking
markets in some areas (especially non-voice BPO).
As shown in Exhibit 4, while French and bi-lingual work
constitute ~75% of the market, suppliers also deliver
meaningful scale for English-speaking markets (e.g., US, UK).
There are examples of global companies that have been
successful serving English-speaking markets from Mauritius.

Inbound: Customer service, helpdesk, query
resolution, bookings
Outbound: Campaigns, Customer surveys, telesales,
collections
F&A and HRO (e.g., Account Payable, General
Ledger, Accounts Receivable, Payroll, Employee
benefits, Global mobility, Reporting and Compliance)
Insurance claims and policy administration
Account servicing
Applications development and maintenance using
Microsoft technologies, Java/J2EE, etc.
Technical service desk
Datacenter operations and disaster recovery
Business research
Information services
Data and document management
Content management and publishing
Exhibit 4
Employment distribution by language of service delivery
100% = 10,400
Other languages1 – 1%
34%
Bi-lingual
(English & 40%
French)
Only French

25%
Only English

Pure English work is
mostly non-voice BPO
(e.g., payroll, claims
processing)
Limited English voice
work in Mauritius
1 Spanish, Dutch, Italian and German
6
D. Comparison of Mauritius with other offshore
destinations
Exhibit 5
The report compares Mauritius with its relevant peer group
across three broad areas: costs, labor, and structural factors.
Direct operating cost per FTE for English contact center services
2009; US$ ‘000 per annum per FTE
MARKET AVERAGES
Costs
Mauritius is one of the lowest-cost emerging destinations for
IT/BPO services as seen in Exhibit 5. Mauritius offers
significant arbitrage potential (60-70% on an overall operating
cost basis) relative to source markets such as UK and France.
Further, we expect telecom costs in Mauritius to reduce further
with the introduction of the second fiber-optic cable, which will
further strengthen Mauritius’ cost position.
66-70
Labor pool
While Mauritius has a small labor pool (~9000 tertiary
graduates annually), it has certain key strengths with respect to
its talent pool. First, the industry can tap into alternative talent
pools (e.g., school leavers) that have proven effective for BPO.
Second, the talent pool increasingly views IT/BPO as a
relatively attractive career compared to other sectors. Third,
Mauritius’ bi-lingual skills provide a significant competitive
advantage. Given these strengths, the talent pool in Mauritius is
sufficient to accommodate four to six new companies per year
with moderate scale (~500 FTEs).
U.S.
Tier 2
Structural factors
Mauritius has clear strengths due to its stability, investorfriendly policies, and infrastructure. Further, the government
and other stakeholders are putting in place multiple talent
development and training initiatives to augment supply.
ENGLISH WORK
Source destination
Emerging offshore
destinations
54-58
Established offshore
destinations
~68-74%
23-25
UK Lithuania
Tier 2
21-23
19-21
South
Africa
Jamaica
18-20
Egypt
17-19
15-17
15-17
14-16
13-16
Ghana Mauritius Kenya Philippines India
MARKET AVERAGES
FRENCH WORK
Direct operating cost1 per FTE for French contact center services
Source destination
Emerging offshore
destinations
44-46
~61-67%
30-32
France
Tier 2
Romania
28-30
Tunisia
27-29
Lithuania
26-28
Poland
25-27
Morocco
21-23
Egypt
20-22
Senegal
15-17
Mauritius
7
Everest experience suggests that investors often evaluate costrisk trade-offs in making location decisions. Exhibit 6 highlights
these trade-offs between Mauritius and its peer group. Given
Mauritius’ strengths in bilingual skills, low costs, and its
conducive business environment, it emerges as an attractive
location for moderate-scale (~500 FTEs) offshore services
targeted at both French and English markets.
Exhibit 6
ENGLISH LANGUAGE WORK
Cost-risk comparison for potential countries serving English-speaking markets
Low
Low-cost, stable location
suited to support moderatescale centers (<500 FTE)
India
Kenya
Ghana
E. Roles that Mauritius can play for investors
Egypt
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Offshore hub for French work
Bilingual work for multinationals with a pan-European
presence
Small-scale, relatively higher-order work in some IT/BPO
areas (e.g., software development, finance & accounting,
business research)
Regional delivery hub for Africa (e.g., shared services)
Risk diversification (e.g., disaster recovery) option for
established offshore locations (e.g., India, Philippines)
South Africa
Jamaica
Cost
Mauritius has a strong role to play in delivery networks of global
investors. Based on Mauritius’ structural advantages and
companies’ experiences to date, the report highlights some
potential ways in which investors could consider leveraging
Mauritius for offshore IT/BPO services. These include:
Philippines
Mauritius
Low cost however,
small talent pool and
relatively less evolved
infrastructure
Established low
cost, locations
for mega scale
(multiple ‘000
FTE) operations
Large English-speaking talent
pool suited to support largescale centers (1000-2000
FTE), but relatively higher cost
Native Englishspeaking location; but
relatively higher costs
High
High
Low
Risk
FRENCH LANGUAGE WORK
Cost-risk comparison for potential countries serving French-speaking market
Low
Low cost but relatively
less evolved infrastructure
and small talent pool
Lowest cost, stable location,
suited to support moderatescale centers (~500 FTE)
Mauritius
Senegal
Cost
Morocco
Egypt
Lithuania
Poland
Scalable and
stable locations,
but relatively
higher costs
Tunisia
Romania
High
High
Limited French
skills and
relatively higher
costs
Risk
Low
8
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The IT-BPO market has been growing at a rapid pace
and has become an integral part of the global sourcing
phenomenon
Information Technology Offshoring (ITO) market
Global offshoring market size
2004-2008; US$ billion


Business Process Offshoring (BPO) market
BPO market growth (2004-2008 CAGR1): ~35%
Overall offshore market growth (2004-2008 CAGR1): ~29%
89-93
70-76
59-65
47-51
30-35
~35%
~65%
2004
35-37
~40%
26-29
22-25
17-19

10-12
20-23

30-32
37-40
2005
2006
44-47
2007
54-56
~60%
Offshoring of business
processes is becoming
increasingly mainstream
following the success of
the offshore delivery of
IT services
The growth in BPO has
exceeded the growth in
the overall offshore
market growth in the past
five years
2008
1 Compounded Annual Growth Rate
Source: Everest Research Institute (2009)
10
Offshore BPO market captures a diverse set of
services and processes across industry verticals
INDIA EXAMPLE
Revenue distribution by service offerings
2008; US$ billion
100% = 13
Customer Interaction &
Support (call center)
42%
Industryspecific
BPO
services

27%

3%
Other BPO
services
13%
9%
Knowledge
services
Finance & accounting
Customer Interaction &
Support, which has
historically been the leading
segment, continues to
account for close to 40% of
the market
Overall, over a quarter of the
market is now providing
vertical-specific processes
4%
2%
Human Resources mgmt.
Procurement services
Note: Revenues and employees for domestic BPO (Indian clients) excluded from the analysis
Sources: Everest analysis (2008); response from study participants; NASSCOM
11
The global sourcing location landscape is evolving
rapidly as investors have multiple options today
Multiple Eastern European
countries (e.g., Czech Republic,
Poland, Hungary, Romania)
Canada
Western
Europe
Caribbean
Multiple location
options (e.g.,
Brazil, Mexico,
Argentina, Chile)
Number of
options in
North Africa
Large domestic
market, but nascent
offshore experience
Eastern
Europe
China
Nigeria
Egypt
S.E. Asia
India
Kenya
Mauritius
South
Africa


Philippines a key
destination
Multiple emerging
countries (e.g., Malaysia,
Vietnam, Thailand)
Investors today have over 150+ credible offshore delivery options (cities); up from 50 four years ago
12
As a result, multiple countries are competing to grab
share in the offshore market
BPO EXAMPLE
Share of offshore BPO market
US$ billion
100% =
Emerging offshore
destinations1
destinations
(India, Philippines)
Traditional sourcing
destinations
(Canada, Ireland)
10-12
17-19
22-25
26-29
7%
9%
13%
16%
India
dominant in IT
35-37
23%

41%
52%
2004
46%
45%
2005
49%
38%
2006
52%
50%
32%
27%
2007
2008

India and Philippines
together constitute
over half of the
offshore BPO market
Market share is
shifting towards
emerging offshore
locations, as they
become increasingly
significant
1 Includes Czech Republic, Romania, Poland, Hungary, South Africa, Mauritius, Egypt, Nigeria, Morocco, Mexico, Brazil, Argentina,
Colombia, Chile, Costa Rica, Singapore, Malaysia, Jamaica, El Salvador, Peru, Panama, etc.
13
Further, investors are building global delivery networks
and in doing so, they are diversifying beyond the
established locations (India, Philippines)
NOT EXHAUSTIVE
Example: Global financial services major
Regional delivery centers
Offshore delivery centers
Investors assess
locations based on a
combination of cost,
risk and labor pool
available.
In addition, the role
of each location in a
network is
determined based on
fit across the
following
dimensions:
 Geographies
 Functions
 Industries
 Scale
F&A for Europe and
Middle East markets
Ireland
Belfast
Application Development and
Maintenance, data processing
for global businesses
Poland
Krakow
IT work for Latin America
Warsaw
Budapest
Hungary
Beijing
Mexico city
Shanghai
India
Mumbai
Brazil
Chile
Santiago
Dalian
China
Mexico
Sao Paulo
Application Development
and Maintenance for North
America
Bangalore
Philippines
Metro Manila
Singapore
Loans processing,
contact center, and
analytics for global
businesses
Customer care,
transaction
processing for
U.S. and
Asia-Pacific
businesses
Opportunity for Mauritius to participate in the growing offshore phenomenon
14
Table of contents
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15
The global sourcing opportunity is large and significant
Global sourcing market size and opportunity
2008; US$
Offshore BPO market size by type of function
US$ billion
INDIA EXAMPLE
100% =
1 trillion
Back-office
13
220-280
58%
90%
60-61%
Front-office
89-93 billion
42%
10%
Current offshore ITBPO market size
(2008)
Current offshore
BPO market size
(2008)
Addressable offshore
IT-BPO market
opportunity
Theoretical opportunity to
grow market 10 times to
approximately US$1 trillion
India’s
addressable
offshore BPO
market opportunity
Within BPO, while voice work is likely to grow; nonvoice is likely to become increasingly significant
Sources: Everest Research Institute (2009); NASSCOM
16
However, the sector is witnessing some slowdown due
to the global recession
ACV1 of outsourcing transactions signed
US$ million
4,074
3,804
Average
Outsourcing transactions signed
Number of transactions
4,011
481
3,553
3,207
2,972 2,989
2,602
Q3
Q4
Q1
Q2
2007 2007 2008 2008
403
385
417
455
467
423
333
Q3
Q4
Q1
Q2
2008 2008 2009 2009
Average deal size has shrunk over the previous
several quarters
Q3
Q4
Q1
Q2
2007 2007 2008 2008
Q3
Q4
Q1
Q2
2008 2008 2009 2009
The number of outsourcing transactions have
remained flat and range bound
1 Annualized Contract Value
Sources: Everest Research Institute (2009); NASSCOM
17
While offshore market growth is likely to be tempered
over the next 12-18 months, the medium-long term
outlook remains robust
Factors likely to affect offshore
BPO growth




Firms facing survival pressures

Drop in underlying business
volumes

Uncertainty driving slower
decision making
Offshore BPO
industry
Political sentiments against
offshoring (job losses)

Offshoring a key lever to cut
costs
Significant untapped
opportunity
Mergers and acquisitions
driving additional opportunities
Factors likely to drive offshore
BPO growth
Given these countervailing forces impacting growth, The Everest Research Institute expects the
growth rate of the offshore BPO market to be tempered (between 5-15%) over next 12-18 months.
However, the medium-outlook remains robust, with growth rate expected to pick up to 20-30% levels
18
Table of contents
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 Key facts about the Island nation and its economy
 ICT sector – The fifth pillar
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19
Quick facts on Mauritius
Mauritius, an island nation, has strong cultural affinity with France, UK, and India due to its history…

Africa
Indian
Ocean

Mauritius


Situated off the coast of African continent east of Madagascar,
Mauritius is a small island nation in the southwest Indian Ocean with
a population of 1.28 million people
History of colonialization by the Dutch, French and then by the British.
Under the French rule, the island developed a prosperous economy
based on sugar production and exports. Achieved independence from
the British in 1968
Mauritians are bilingual (speak both English and French). Creole, the
local language spoken by over 80% of the population, is similar to
French. Some Indian languages (e.g., Bhojpuri, Hindi) also spoken
Ethnic groups comprise of Indo-Mauritian (68%), Creole (27%), SinoMauritian (3%), and Franco-Mauritian 2%. Majority are Hindu (48%)
with the others being Roman Catholic (24%) and Muslim (17%)
…and is supported by a growing economy conducive for foreign investment
Key indicators
2005
2006
2007
2008
GDP growth (percentage)
2.3
5.1
5.4
5.3
Per capita GNI (US$)
4314
4810
5576
6157
Inflation FY (percentage)
5.6
5.1
10.7
8.8
Budget deficit FY, (percentage GDP) 5.0
5.3
4.3
3.3
Unemployment rate (percentage)
9.1
8.5
7.2
9.6



The Mauritian economy has registered a
healthy average growth rate of 5.6% in
recent years
Government has undertaken major
economic reforms to facilitate business in
Mauritius
These enable investors to set-up and
operate in the country seamlessly
Sources: CIA Factbook; US Department of State; World Economic Forum; World Bank, Board of Investment; Everest Research (2009)
20
Even though a part of the African continent, Mauritius
is widely regarded as a relatively “developed” nation

GDP per capita
current prices US$ at PPP
7,000
Mauritus
Senegal
Morocco
Tunisia
Egypt
South Africa
Ghana
Kenya
6,000
5,000
4,000
3,000
2,000
1,000
0
2007
2008


2009E

Estimated at ~US$12,000 at PPP,
Mauritius has the sixth highest GDP
per capita in Africa, after Equatorial
Guinea, Seychelles, Botswana,
Gabon and Libya
Widely regarded as a developed
country, Mauritius has a higher GDP
per capita than several African
countries that are emerging as
offshore services locations
Mauritius has evolved from a lowincome, agriculture-based economy
to a growing middle-income
economy reliant on sugar, textiles
and apparel, financial services, and
tourism
This has resulted in a more
equitable income distribution and a
much-improved infrastructure
Sources: CIA Factbook; US Department of State; World Economic Forum; World Bank; Everest Research (2009)
21
Uptick in services economy, primarily driven by the
hospitality sector but branching out into other services
Composition of GDP by country
2008; US$ billion
100% =
Services
162.8
48%
16.1
Key facts on the economy

34.5
8.6
38%
59%
86.3
276.7
40.1

48%
66%
70%
61%

25%

Industry
38%
38%
17%
28%
37%
Agriculture
24%
14%
Egypt
5%
Ghana
31%
25%
14%
Kenya Mauritius Morocco
3%
South
Africa

11%
Tunisia

Composition of the GDP is gradually shifting
from manufacturing and agriculture to wards
services. The services sector accounted for
61% of the U$4.4 billion GDP in 1997, while
by 2008 its share increased to 70% of the
US$8.6 billion GDP
Rising tourism revenue is a key driver of this
increasing share of services
Also, Mauritius has attracted more than
32,000 offshore entities, many aimed at
commerce in India, South Africa, and China.
Investment in the banking sector alone has
reached over US$1 billion
Further, service sector is gradually
expanding into information and
communications technology, financial
services, hospitality and property
development
Tourism, agriculture, offshore financial
services and manufacturing have been
identified as the four pillars of the economy
There is a conscious effort by the
government to grow the services economy
with a focus on ICT
Mauritius has a higher contribution of services to its GDP, than several other African nations. This underscores the
positioning of Mauritius as a services platform, especially customer service orientation from the hospitality industry
Sources: CIA Factbook; US Department of State; World Economic Forum; World Bank; Everest Research (2009)
22
The ICT sector is being recognized as the ‘fifth pillar’
of Mauritius’ economy
Mauritius’ vision for ICT
a. Enable the ICT sector to contribute into the GDP of Mauritius
b. Lead to the ICT sector employing more Mauritians
c. Make for sustained availability of skilled manpower to power the sector, and
d. Facilitate contribution from the ICT sector into the Mauritian export basket, initiatives to create an
information society revolve around the instilling of a “technology temper” in Mauritians to bring about
increased adoption, ICT-enabled knowledge networking among citizens, and generally accepting ICT as a
stream of professional persuasion at par with others
National ICT strategic plan
 Target to create 29,000 jobs in the ICT sector by
2011 and contribute to 7% of GDP by 2011
 Develop a sustainable ecosystem (i.e., talent pool,
physical infrastructure, policies, regulatory
environment, etc.) and create an investor-friendly
environment
 Increased adoption of ICT as a preferred career
choice
 Create an ICT-ready environment through increased
usage and adoption of ICT
 Inculcation of a ‘technology temper’ and
knowledge networking among citizens
Contribution of the IT-BPO sector to GDP
Percentage
7
4
1
2005
2007
2011(E)
It is forecasted that the IT-BPO sector will
contribute up to 7% of the country’s GDP by
2011
Sources: NICTSP; Everest Research (2009); Board of Investment
23
Mauritius has made significant progress in putting the
ecosystem in place from an ICT-readiness standpoint
(page 1 of 2)
Infrastructure
development





Developing an ICT
conducive
environment




Well-developed digital network infrastructure and
high-bandwidth international leased lines through
the SAFE fiber optic cable
Advanced services include the introduction of
WiMAX technology, HSDPA technology and 3G
mobile networks
Furthermore, the second fiber optic will connect
Mauritius to France and UK, amongst other
destinations, in 2011
 This is expected to further bring down costs and
increase availability
Development of technology parks and free-trade
zones. For example, Ebene Cybercity, a state of the
art cyber park, houses 52 IT/BPO companies
Additional technology parks under construction
Highest penetration of internet users in Africa
(internet penetration estimated at 14.5% for 2008
with a total of 185,000 internet subscribers)
Post liberalization of the telecom sector, the
number of connected lines has grown to over
364,500 in 2008 from 65,00 in 1991.
Fixed line penetration of 28.7% for its 1.2 million
population
Prevalence of e-banking and e-governance
Ebene Cybercity
Internet Penetration in Mauritius
Percentage
10.3
5
10.9
13.1
14.5
6.3
2003 2004 2005 2006 2007 2008
Sources: Everest Research (2009); Board of Investment; NICT Survey, ICTA
24
Mauritius has made significant progress in putting the
ecosystem in place from an ICT-readiness standpoint
(page 2 of 2)
Talent
development
Formal education
 Significant rise in secondary and tertiary education
enrolments
 Increase in adoption of knowledge-based
programs (e.g., information technology,
engineering, finance and accounting, business
management) among students
Training and skill-development programs
 HRDC: Administers training grants for employers
 Empowerment Foundation: Supports special
training and skill-development programs for
unemployed people
 ICT Academy: Soft skills and technical/domain
training to industry workers and aspirants
 Customized networking and telecom courses
dispensed in French
Policy
Development




Conducive business environment (e.g., low tax
rates)
Streamlined process for investors to live and work
in Mauritius (Occupation permit issued in ~3
working days)
Modern labour laws adopted to the needs of the
ICT industry
Data Protection Act to comply with EU IP and
data protection norms
Sources: Everest Research (2009); Education statistics department; Board of Investment
Rise in tertiary enrolments
‘000s
26
2004
Year
1998
2001
2002
2003
2006
2009
29
2005
33
35
2006
2007
Relevant legislation
Copyright Act (Amendment)
ICT Act
Electronic Transactions Act
Computer Misuse &
Cybercrime Act
Business Facilitation Act
Data Protection Act
25
Overview of the education system in Mauritius
Universities, Institutes and colleges
awarding Bachelor’s degrees,
Diploma, Master’s Degree and PhDs
Annual enrolments
~10,000 students in
2007/08; a 5.4%
increase from the
last year
Tertiary
level
Some SC qualified students
may proceed directly for
tertiary courses such as
distance education, diplomas
Higher School
Certificate (HSC) /
General Certificate of
Education A-level
~8,500 students
appeared for HSC
in 2007/08
~17,350 students
examined for SC
School Certificate (SC)/General
Certificate of Education O-level
Type of institutions/
credentials awarded



University-level first stage
(Diploma of 2 year duration)
University-level second stage (34 year Bachelor)
Upper secondary school

Length of program: 2 years


6 public institutions

3 polytechnics

30 private institutions

180 schools

180 schools
University-level third and fourth
stages (Masters, M.Phil, PhD)


Number of
institutions
Primary and lower-secondary
school
Length of program: 11 years
including kinder garden
Education in Mauritius is provided free of cost till the senior secondary level and in government colleges till the
tertiary level
Sources: Everest Research (2009); Education statistics department, Mauritius
26
Key organizations involved in ICT development
The Board of Investment (BOI) is the official Investment Promotion Agency of the Government of
Mauritius. It is viewed both locally and internationally as a strategic partner for any investor wishing
to set up its operations in Mauritius.
http://www.boimauritius.com
The National Computer Board (NCB) was set up by the National Board Act to promote the
development of Information and Communication Technologies in Mauritius. It vision is to be the key
enabler in transforming Mauritius into a Cyber Island and the regional ICT hub.
http://www.ncb.intnet.mu/
Outsourcing & Telecommunications Association of Mauritius (OTAM) is an association of call
centers/BPO’s, software developers, Internet Service Providers, International Long Distance
operators established to promote the creation of an environment conductive to the growth of the ICT
industry in Mauritius.
http://www.otam.mu/
Human Resource Development Council was set up in accordance with the HRD Act with 27
members representing the different sectors of the economy. It’s aim is to promote human resource
development in line with national economic and social objectives for successful transformation of the
country into a Knowledge Economy.
http://www.hrdc.mu/
The National Empowerment Foundation administers, controls and operates the Placement for
Training Programme under the Empowerment Programme (EP). It attempts to address the problem
of mismatch in the labor market, and the high rate of unemployment. The programme is designed to
provide the unemployed with an in-company placement coupled with a work-related formal training
so as to make them employable.
27
Key organizations involved in ICT development
Enterprise Mauritius is a collaborative partnership between industry and the government that aims to
help businesses in Mauritius expand into regional and international markets, and at the same time
develop their internal capability to meet the challenges of international competition. Focus areas
would be to promote exports, support enterprise development and provide competitive intelligence.
www.enterprisemauritius.biz
Founded in 2003 the Chambre de Commerce et d'Industrie France-Mauritius (CCIFM) comprises of
96 companies and entrepreneurs from France and Mauritius. The CCIFM aims at nurturing the
commercial relationship that exists between the two countries and works in close collaboration with
the French embassy, the French economic mission, the Board of Investment (BOI) and the Mauritius
Employers Federation.
www.ccifm.intnet.mu/
Founded in 2001, the Mauritius IT Industry Association (MITIA) represents the interests of the data
processing industry near the government and contributes to the setting up of an environment which
will support the prosperity and the competitiveness of the data processing industry at the
international level and which is to strategic and commercial alliances. MITIA also nurtures the
establishment of close connections with other regional and international ICT associations.
http://www.mauritius-mitia.org/join.html
28
Table of contents



 Overall market size and growth
 Key facts on current scope of services
 Case studies that illustrate scope and maturity of services



29
The IT-BPO industry in Mauritius has witnessed an
impressive growth of 45% annually between 2004-2008
Evolution of employment opportunities in Mauritius
2004-2008; Total employees in IT-BPO sector
Target to create
29,000 jobs in the
ICT sector by 2011
29,000
10,440
2,392
2004


3,801
2005
5,513
2006
6,960
2007
2008
2011E
The IT-BPO industry in Mauritius has experienced sustained growth from less than 100 companies
in 2004 to 250+ companies in 2008. Employment opportunities have grown ~5 times since 2004 with
several marquee players establishing operations
The IT-BPO sector generated revenues of ~US$200 million during FY 2008-09
Sources: Everest Analysis (2009); NICTSP, Questionnaire responses; Board of investment, Mauritius
30
A numbers of suppliers and captives have established
their operations in Mauritius
NOT EXHAUSTIVE
Global suppliers
Captive operations
Local/regional
Mauritius suppliers
Source: Everest Research (2009)
31
Offshore market size in Mauritius is comparable to that
of other emerging destinations
Offshore-experienced IT/BPO talent pool by country
2009; Number of employees in ‘000s
44-45
Poland
31-32
Morocco
South Africa
9-10
Mauritius
9-10
Tunisia
Senegal
Jamaica
Kenya
48-52
Poland
13-16
Morocco
13-14
Egypt
Number of leading global suppliers and
captives serving offshore markets
2009
12-14
Egypt
Has a large domestic
market of over 100,000
jobs
7-8
6-7
5-6
0.8-0.9
14-16
South Africa
13-15
Mauritius
Tunisia
1-2
Senegal
1-2
Jamaica
Kenya
4-6
2-4
Offshore industry size in Mauritius is comparable to many of its larger peers (e.g., South Africa, Tunisia)
Source: Everest Research (2009)
32
Majority of the service delivery from Mauritius is BPO
focused, with a fair mix of voice and non-voice BPO
services
Employee split by outsourcing services
BPO employees split by types of BPO functions served
100% =
100% = 10,400
Non-voice
BPO (52% of
the market)
Others1
Knowledge services (Data
Mgmt., business research,
and information services)
Corporate services
(F&A, HR)
4%
ITO 11%
8,840
11%
13%
Industry specific- BPO
(Insurance claims,
account servicing)
28%
Voice BPO
(front-office)
48%
85% BPO
Voice BPO
(48% of the
market)
Mostly ADM
Number of employees
1 Include Multimedia, 3D/Graphic design, Engineering services, etc.
Note: The analysis is representative of ~70% of the market ( ~7,280 employees) extrapolated to cover the entire market (~10,400 employees)
Sources: Questionnaire responses; Interviews with leading service providers, Everest analysis
33
While diverse functions are currently being served
from Mauritius, the scalability is limited
Typical scale of
large providers
Typical processes delivered
Voice
(French and Englishlanguage call center)
400-500 FTEs

Non-voice
(Back-office BPO)
250-350 FTEs




IT services
100-150 FTEs



Knowledge services
50-100 FTEs




Inbound: Customer service, helpdesk,
query resolution, bookings
Outbound: Campaigns, Customer
surveys, telesales, collections
F&A and HRO (e.g., Account Payable,
General Ledger, Accounts Receivable,
Payroll, Employee benefits, Global
mobility, Reporting and Compliance)
Insurance claims and policy
administration
Account servicing
Applications development and
maintenance using Microsoft
technologies, Java/J2EE, etc.
Technical service desk
Datacenter operations and disaster
recovery
Business research
Data and document management
Content management and publishing
Player landscape







Includes global and local/regional
suppliers
Local/Regional suppliers have a
larger average size of operations
than their global counterparts
Numerous captives operating
shared service centers
Significant presence of global
suppliers running small scale
transaction processing operations
Evidence of IT work, though small
scale
Global suppliers more prominent
in this space
Niche providers and global
suppliers operating in this space
Sources: Everest Analysis (2009); Interviews with IT-BPO suppliers and captives in Mauritius
34
Though most of the work delivered currently is
transactional in nature, Mauritius is starting to move up
the value-chain with few instances of higher-order work
Increasing complexity and value delivered
BPO EXAMPLE
Majority of current service delivery in Mauritius
Strategic
Early evidence of higher-order work
Judgment oriented
Rule-based/Transactional
Legal Process,
Business Research
Compliance, MIS
and audit
Customer survey,
high-value customer
service, etc.
Contact
Center
Knowledge
services
Back-office BPO
(F&A example)
Risk analytics
Financial modeling
Audit
Investment research
Legal process
Business research
Capital budget
Treasury & risk
Lifecycle
management
Management reporting
Channel management
Reporting
Cross sell
Fixed assets | Tax
Customer analytics
Accounts receivable
Customer surveys
Accounts payable | General accounting
Compliance
Data management and archiving
Presentation support
Sales and marketing
Customer service (simple queries)
Customer data acquisition
Increasing scope/diversification of service delivery
Source: Everest Analysis (2009)
35
Majority of service delivery is Bi-lingual with clear
strengths in French-language delivery
100% = 10,400
Other languages1 - 1%
Bi-lingual
(English &
French)
34%
Only French
40%

25%
Only English

Pure English work is
mostly non-voice
BPO (e.g., payroll,
claims processing)
Limited English voice
work in Mauritius
Mauritius is one the few offshore locations that can support bilingual operations (French and English) in
meaningful scale
1 Spanish, Dutch, Italian and German
Note: The analysis is representative of ~70% of the market ( ~7,280 employees ) extrapolated to cover the entire market (~10,400 employees)
36
While France is the largest offshore market served,
there is meaningful work delivered for Englishspeaking markets also
Employment distribution by source geography served
French-speaking
population of North
Africa and English
speaking population of
sub-Saharan Africa
100% = 10,400
Africa Others1
3% 2%
Domestic
10%
43% France
16%
French-speaking
population of Canada.
However, there is
evidence of U.S
focused work as well
U.S.,
Canada
19%
Largely nonvoice work
Largest market
served across
Contact center, BPO
and IT services
7%
UK
Benelux
Key Anglo-Franco
market
1 Includes Middle-East, Asia, Caribbean, Israel, Russia
Note: The analysis is representative of 70% of the market ( ~7,280 employees ) extrapolated to cover the entire market (~10,400 employees)
37
While local/regional service providers account for
~70% of the industry, global companies drive scale
Employment distribution by type of provider
Number of employees
Average scale of operations by type
of provider
Employees
Scale of largest
provider
Employees
100% = 10,400
Offshore
captives
12%
Global
supplier
250
800
Global
suppliers 17%
Offshore
captive
150
350
71%
Local/regional
suppliers
Local/regional
supplier
50
650
Multiple global suppliers and offshore captives in Mauritius (as illustrated on Page 26)
38
A wide range of industry verticals are being supported,
with some spikes in Telecoms and high-tech, BFSI
Employment distribution by vertical supported
Number of employees
100% = 10,400
Other industries1
23%
26%
Logistics 3%
4%
Manufacturing
Travel, hospitality,
and tourism
Telecom and
Hi-tech
22%
8%
14%
E-commerce, media
and entertainment
BFSI
BFSI
 The evolved domestic offshore investments
industry potentially provides ‘transferable skills’ to
the BPO industry
Tourism and Hospitality
An incubator of foreign language skills (e.g.,
Spanish, Italian, German, Dutch), in addition to
being fluent speakers of French and English
 Customer service orientation helps in improved
employability for the BPO sector

Logistics
 Several international logistics providers are
present in Mauritius given its geographical
positioning to serve the African region
 Examples of captives leveraging Mauritius as a
shared services delivery location
Telecom
 Liberalization of the telecom sector has resulted in
availability of domain-specific skills within the
domestic market. (e.g., Emtel, Orange)
1 Others refer to all other client industry verticals (e.g., healthcare, pharmaceutical, retail, government etc.)
Note: The analysis is representative of ~70% of the market ( ~7,280 employees ) extrapolated to cover the entire market (~10,400 employees)
39
Several examples and case studies demonstrate that
service providers in Mauritius are successfully
delivering a wide-array of services to offshore clients
1
Non-voice
transactional BPO
5
4
2
Contact center
(French and bilingual)
Wide scope of services and
multiple leverage models
IT and knowledge
services
3
Evidence of relatively
niche/domain-specific
work
40
1
Non-voice transactional BPO case studies
2
1
5
4
Examples of non-voice BPO work delivered
Third-party administration of Payroll and related HR
services for a UK client



The client is UK’s leading hospitality company that has
outsourced its HR and payroll to the service provider as a
part of a 5-year outsourcing deal
Mauritius offshore delivery center along with the service
provider’s onshore facility in the UK, administers HR
services, payroll and related technology services to more
than 33,000 employees of the client worldwide
The Mauritius team has been set up with 50% of existing
employees and 50% new graduates from universities and
the domestic hospitality/tourism sector
Case Vignettes: Back-office processing for the French
market







The team operates 24/7 and provides non-voice and
related-IT services in HRO
Software development using Microsoft technologies (e.g.,
.net, VB, C#)
3

HR transaction processing and payroll as per UK norms
Shared services unit of a large multinational delivers
transactional F&A processes (e.g., invoice processing,
claims) for its offshore operations in French-speaking
countries
A global outsourcing services suppliers delivers F&A (AP,
GL, AR, and business services (e.g., Visual aids) for its
French-speaking customers in Europe
A leading global BPO supplier provides order management
and transactional F&A to its French-clients
Qualified accountants of F&A shared service operations
perform claims approval, payments, compliance and audit
for the French-speaking African countries
Data capture, cleaning and data management services of
media reports, press releases for a leading publication
house in France
Sources: Questionnaire responses; Interviews with leading service providers
41
2
Contact center (French and bilingual) case studies
1
2
5
4
Examples of contact center services delivered for French market
Administration of bilingual inbound assistance services
for a leading assistance company
Case vignettes: French Contact Center





A global BPO supplier provides third-party sales support
(e.g., quotations, follow-up, maintenance contracts) for the
French operations of a leading high-tech and telecom MNC
Third party after-hours customer service for high-value
French customers (corporate and platinum/priority) of a
leading credit card company


Third Party campaigns on new product offering, sales
support and post-sales customer service for a leading
global media and publishing corporation

Third Party inbound customer service for France’s leading
directory services/listing company focused on the Frenchmarket

Third-party outbound customer satisfaction surveys for the
French customers of a leading auto manufacturer


3
Outbound fund-raising for the Art and donations for
community service for a leading European insurer
The client is a leading player in the international assistance
market operating in the vehicle, travel and lifestyle,
medical, and home assistance space
The client sources inbound assistance services for France,
Part of Europe and Canada and Southern African region,
including transactional back-office services for the group
company in UK
The inbound English call center team in Mauritius delivers
hotline, emergency assistance, claims, helpdesk,
concierge, and customer service for the client’s customers
On the non-voice side, the team in Mauritius provides
claims processing, medical and legal transcriptions and
software development services to its client’s group
company in the UK
The center is complaint with the European Data Protection
Act for processing sensitive financial information of its
European clients
42
3
Evidence of relatively niche/domain-specific work
1
2
5
Examples of relatively niche/domain-specific work delivered for offshore clients
Offshore financial services center of a leading European
Bank

With a team of over ~170 people, the offshore banking
entity at Mauritius provides a range of offshore banking
services to financial institutions, international business
groups and its private clients

The Fiduciary team provides middle-office support services
(e.g., accounting, administration) to the bank’s corporate
trust structures and provides solutions for institutional
clients




The private wealth management team provides custodian,
investment, portfolio management services to high-net
worth clients taking advantage of the extensive range of
double taxation agreements available to the entity.
Attractive concessions include reduction of withholding tax
on bank interest in a number of DTA jurisdictions
3
Managed services in communication network solutions


4

The trust and securities team offers corporate services,
Fund services and Trust Services backed by a supporting
team providing Statutory and Fund Accounting support
A leading European provider of worldwide business
communication solutions operates its global service center
from Mauritius
The team at Mauritius provides LI and L2 technical support
for incident and problem management, service delivery
coordination and project management for IT, Telecom and
IP projects
~150 FTE managing service desk, ~50 engineers for
network deployment, network optimization and IT security;
~50 FTEs performing IP telephony support, maintenance
and upgrade functions
The talent pool employed are B.Sc graduates, engineers,
A-levels with specialist networking certifications (e.g.,
CCNA, MCSE)
The global transaction support team is responsible for the
establishment and ongoing administration of capital
markets special purpose entities through provision of
management reporting, bookkeeping, accounting and
accompanying administration services
43
4
IT and knowledge services case studies
1
2
5
Examples of IT application outsourcing and knowledge services work delivered
A large global supplier provides Application development
and outsourcing services to its French-speaking European
clients using technologies such as Oracle family of
applications, SAP, Java/J2EE and other Netcentric
technologies, as well as dedicated testing services




3
Delivery of platform-based business research and
information services
Case Vignettes: IT Applications development

4
Application development in Java/J2EE and Microsoft
Technologies for supporting a large Anglo-Dutch bank’s
applications
Application development and maintenance of document
management and content management platforms for a
leading publishing and document services supplier


A leading provider of database and analytical tools
providing investment research information to the
investment industry/community, operates its delivery and
research operations in India and Mauritius
The delivery centers create, manage and administer
several platform-based product offerings around databases
of environmental, social and governance information
covering 2,500+ publicly listed companies
While the India team provides data mining and information
gathering, the team at Mauritius verifies, cleans, tests and
collates the information
~80 research analysts having backgrounds in Economics,
Finance and Social sciences perform quantitative and
judgment-based work from Mauritius
44
5
Investors leveraging Mauritius in multiple ways
1
2
5
4
Examples of distinctive role in global services supply chain
Regional hub for the African region and parts of Europe





A leading global telecom equipment supplier operates its
shared services center for the African region from Mauritius
Has selected Mauritius over other locations for bilingual
skills, low cost structure, stable business environment,
investor friendly policies, and favorable quality of life for its
expatriates
The 170+ strong team delivers transactional F&A (AP, GL,
AR). In addition, some higher-order processes such as
compliance, closing of books, management reporting are
also delivered from the operation
Leverages technology (ebanking, ERP platforms) to
transmit high-volume of data/transactions
3
Complementing supplier’s global delivery network in
delivering IT projects




Employs B.Com graduates with ACCA/CIMA qualifications
A couple of leading global suppliers of outsourcing services
leverage Mauritius to support delivery of their projects for
the European market or French Canada
While a typical ‘follow-the-sun’ approach is used to
leverage Mauritius in certain projects, the French-skills of
Mauritians proves to be a distinctive capability in several
other projects
Reading technical specification documents, design
documents, interacting with French-speaking client teams
constitute areas in IT projects where Mauritius plays a
distinctive role
Similarly, contact center (emails, chat) and processing
invoices in French in BPO
45
Investor experiences have been positive
Investors express their satisfaction with Mauritius operations
46
Table of contents




 Costs
 Talent pool


47
The report compares Mauritius with other offshore
destinations across three broad factors that most
companies trade-off in making location decisions


Fully loaded operating cost (including salaries, real estate,
telecom, etc.)
Granular views to costs as applicable to the type of function
 Call center (French and English)
 F&A (transactional)
 IT ADM
Costs
Multiple views
 Entry-level pool
 Language skills
 Specialized skills
 Experienced pool








Telecom and other
infrastructure
Connectivity/Accessibility
Geo-political and
macroeconomic stability
Safety and security
Quality of Life
Legal and regulatory
environment
Business environment
Incentives
Note: FS stands for Financial Services
48
Mauritius has been compared with its relevant peers in
this assessment
Types of offshore
locations
Examples of countries
Established
locations

Emerging
locations


India
Philippines
Key characteristics


French-speaking locations
 Morocco
 Tunisia
 Senegal
 Romania
 Poland
 Lithuania



English-speaking locations
 South Africa
 Kenya
 Ghana
 Jamaica
 Egypt
 Sri Lanka
 Vietnam

Suited to support large scale centers (multiple ‘000
FTEs)
Account for >50% of the global offshore market
Suited to support medium scale (1000-2000 FTE) to
limited scale (~500) centers
Increasingly being considered by investors as they
seek to diversify beyond established locations and
build a global delivery network
Relevant peer group for Mauritius
The report primarily compares Mauritius with its peer group of emerging locations as relevant by function
49
Table of contents




 Costs
 Talent pool


50
Total cost of operations has been assessed based on a
bottom-up analysis of cost of delivery for a specific
function at a city level
ILLUSTRATIVE
Direct operating cost per FTE per annum
US$ per FTE
Salaries
and benefits
Management
Administration
Elements included in above heads




Agent
salaries
Bonus
Statutory
benefits
Other
benefits:
Transport,
Meals




Supervisor
and manager
salaries
Bonus
Statutory
benefits
Other
benefits:
Transport,
Meals




Support staff
(IT, HR,
accounts)
salaries
Statutory
benefits
Training
costs
Attritionrelated costs
Facilities
and real
estate



Real estate
rentals
Fixtures
and fit-outs
Utilities
Technology


Telecom
Equipment
(servers,
switches,
networking,
etc.)
Other direct
operating
expenses

Total direct
operating
cost per FTE
Miscellaneous
bucket


Captures 40+ data
elements
Does not include supplier
margins, travel, and onetime expenses
Costs benchmarked across functions: Call Center (French and English), F&A and IT
51
For English language work, Mauritius offers a cost
advantage over multiple emerging locations
MARKET AVERAGES
Direct operating cost1 per FTE for English contact center services
ENGLISH WORK
Source destination
66-70
Emerging offshore
destinations
54-58
~68-74%
23-25
U.S. Tier 2 UK Tier 2
destinations
Lithuania
21-23
South
Africa
19-21
Jamaica
18-20
Egypt
17-19
Ghana
15-17
15-17
14-16
Mauritius
Kenya
Philippines
13-16
2
India
2
Mauritius presents significant arbitrage opportunity (~70% on operating cost basis) over the UK
1
2
Note:
Source:
Ongoing costs only; excludes margins/mark-ups, centralized corporate overheads, initial investment, set-up costs, and travel costs
For Philippines and India, their respective capital cities Manila and New Delhi have been considered
Exchange rates for local currencies with respect to the U.S. Dollar have been averaged for 7 months from 1-Nov-2008 to 30-June-2009
Everest Research Institute (2009)
52
Further, for French language work, Mauritius is the
lowest cost offshore delivery location
MARKET AVERAGES
FRENCH WORK
Source destination
Emerging offshore
destinations
44-46
~61-67%
30-32
28-30
27-29
26-28
25-27
21-23
20-22
15-17
France Tier 2
Romania
Tunisia
Lithuania
Poland
Morocco
Egypt
Senegal
Mauritius
Mauritius presents significant arbitrage opportunity (~65% on operating cost basis) over France
1 Ongoing costs only; excludes margins/markups, centralized corporate overheads, initial investment, set-up costs, and travel costs
Note: Exchange rates for local currencies with respect to the U.S. Dollar have been averaged for 7 months from 1-Nov-2008 to 30-June-2009
53
Similarly, for F&A and IT, costs in Mauritius are lower
than most other emerging destinations (page 1 of 2)
F&A cost comparison
MARKET AVERAGES
Direct operating cost1 per FTE for transactional F&A services
Emerging offshore
destinations
destinations
34-36
33-35
Poland
1
2
Note:
Source:
Tunisia
30-32
Morocco
27-29
Romania
26-28
Lithuania
23-25
South
Africa
22-24
Jamaica
19-21
Egypt
18-20
18-20
Mauritius
Kenya
15-17
India2
Ongoing costs only; excludes margins/markups, centralized corporate overheads, initial investment, set-up costs, and travel costs
New Delhi has been used as a proxy for India to get the F&A cost
54
Similarly, for F&A and IT, costs in Mauritius are lower
than most other emerging destinations (page 2 of 2)
IT cost comparison
MARKET AVERAGES
Direct operating cost1 per FTE for IT Applications Development and Maintenance
Emerging offshore
destinations
destinations
41-43
41-43
40-42
37-39
33-35
30-32
25-27
Poland
1
2
Note:
Source:
Morocco
Tunisia
Romania
Egypt
Lithuania
Mauritius
22-24
Vietnam
21-23
India 2
Ongoing costs only; excludes margins/markups, centralized corporate overheads, initial investment, set-up costs, and travel costs
New Delhi has been used as a proxy for India to get the IT cost
55
Key drivers are the lower salaries in Mauritius and in
some cases, lower telecom costs relative to peers
MARKET AVERAGES
Breakup of direct operating cost per FTE per annum
2009; US$ ‘000 per FTE per annum
30-32
Miscellaneous1
28-30
27-29
FRENCH CALL CENTER
26-28
25-27
21-23
Cost heads
Telecom
15-17
Facilities
Salaries,
Management,
and
Administration
Romania

20-22
Tunisia
Lithuania
Poland
Morocco
Egypt
Senegal
Mauritius
Entry-level salaries are lower in Mauritius compared to its peers for French call center work
School-leavers (SC and HSC) typically employed in Mauritius, compared to tertiary graduates in many other countries
 However, school leavers have proven quite effective for call center work.
 Reasonably good employability of school leavers (20-25%), comparable to that of tertiary graduates in other countries
Salaries for experienced roles are higher given the relatively small pool of middle-senior management talent


1 Miscellaneous costs include training, attrition cost etc.
Note: Exchange rates for local currencies with respect to the Euro have been averaged for 7 months from 1-Nov-08 to 30-June-09
56
While there are opportunities for reduction in
Mauritius’ telecommunication costs, they are lower
than North African countries even at current levels
Trends in Mauritius’ telecom tariffs
Annual rental tariffs for IPLC (telecom)1
2009; US$ per E1 connection
Tunisia
1,63,200
1,36,800
Senegal
1,33,200
Romania
Egypt
67,200
Vietnam
66,737
Ghana
60,000
Mauritius
58,800

46,691
13,325
Target
6,300
72,000
Kenya

7,900
79,080
Lithuania

10,500
93,600
Morocco
India
12,600
1,26,000
Jamaica
South Africa
Telecom rentals / license (IPLC 2 Mbps)
MUR per annum
4,900
3,000
2003
Feb 2006 Jul 2006 Sep 2006 Jan 2009 2010(E)
Telecom costs in Mauritius have been falling significantly over the years (~30% each year)
Costs expected to reduce further through connection to the fiber optic cable (expected in 2010)
This is likely to strengthen Mauritius’ overall cost position
Sources: Everest Research Institute (2009); Real estate reports, BOI
57
Telecom costs in Mauritius are expected to decline
further with the advent of the second fiber-optic cable
Planned initiative



A high-capacity undersea
fiber-optic cable linking
Africa to Asia and Europe
via the Middle East
Expected capacity of
1.28Tb/s enabling highspeed services
Cable expected to provide
Mauritius, and South and
East African countries with
access to major business
centers globally, and
support the growing
demand for broadband
Current status

Cable went live in July 2009
at a landing station in South
Africa to meet the
bandwidth needs of the
Africa continent
Impact and implications




Additional, landing stations
have been planned at
Mauritius, Kenya,
Madagascar and other
points along the east coast
of Africa
Security teams have been
beefed up at various places
to protect the slow moving
cable layers


The fiber optic is expected
to bring down international
bandwidth costs
substantially
Significant increase in
bandwidth, ~ 10 times
current capacity
Multiple telecom operators
expected to become
tenants on the cable and
pass on its benefits to
consumers
Higher availability and
better SLAs are expected to
be offered
Source: Service Provider Executive Interviews
58
Table of contents




 Costs
 Talent pool


59
Multiple relevant views on talent have been
considered for this comparison
Entry-level
specialized skills
(e.g., accounting)
Language skills
Entry-level pool
Views on talent pool
Employability
Relevant views reflective of multiple functions (call center, non-voice BPO and IT)
60
Mauritius has a relatively small talent pool
Annual tertiary education labor pool estimates1 by country
2008; ‘000s
500-502
Poland
328-330
Egypt
274-276
Vietnam
160-162
South Africa
126-128
Romania
Morocco
62-64
Tunisia
58-60
42-44
Lithuania
Ghana
34-36
Kenya
30-32
Jamaica
13-15
Estonia
11-13
Sri Lanka
10-12
Mauritius
7-9
1 Estimated based on assessment of total enrolments annualized over past 3 years and the structure of the education system
Note: Tertiary graduates in Mauritius refer to graduates from government universities, private education and distance mode
Sources: Everest Research Institute (2009); Country-specific education statistics
61
Further, the pool for specialized skills is small
Annual supply of engineering and IT1 graduates
2008; 000’s
52-54
Poland
35-37
South Africa
30-32
Egypt
27-29
Romania
Annual supply of F&A graduates
2008; 000’s
Poland
147-49
Egypt
62-64
South Africa
60-62
31-33
Romania
Vietnam
15-17
Morocco
14-16
Morocco
Tunisia
10-12
Lithuania
15-17
Tunisia
15-17
Ghana
14-16
Kenya
13-15
Kenya
7-9
Lithuania
6-8
Ghana
4-6
Sri Lanka
3-5
Mauritius
1.5-2.5
Mauritius
18-20
3.5-4.5
1-2
Estonia
2-4
Jamaica 1-2
Sri Lanka
2-4
Estonia
Increasing propensity among graduates in Mauritius to pursue F&A and IT-related careers/qualifications
1 IT graduates includes students from pure sciences, mathematics and computer science streams
Note: Excludes students enrolled in overseas programs outside the country
62
While the scale is relatively small, Mauritius has
certain strengths in terms of its talent pool
1
Alternative pools
available to
augment supply
School-leavers (HSC
and SC) in addition to
tertiary graduates
4
2
Willingness to
work in IT-BPO
IT-BPO is a relatively
attractive career
option, compared to
other sectors (e.g.,
manufacturing)
Mauritius’ strengths
in talent pool
Competitive
advantage in
Bilingual skills
Ability to support both
French and English
3
High employability
of entry-level talent
The labor pool in Mauritius is sufficient to support 4-5 additional centers annually with an
average center scale of 400-500 seats
63
1
While the tertiary educated pool is small, providers are
leveraging high-school and school leavers for
transactional and call center work in Mauritius
Profile of talent pool being employed in Mauritius for
transactional BPO and contact center work
2008; ‘000s
Mauritius: Total annual addressable1 entry level pool
2008; ‘000s
Alternative pool

Tertiary
level
Higher School
Certificate/
General
Certificate of
Education A-level




School Certificate/ General
Certificate of Education
O-level
Judgment-based
back-office
processes
IT outsourcing
Call centers
Rule-based backoffice transaction
processing
Contact center
(Inbound/Outbound)
French and English
Suitability for function / role in IT-BPO sector
12-13.5
2-3
3-3.5
7
Tertiary
graduates2
HSC qualified
but not
pursuing
tertiary
education
SC qualified
but not
pursuing
HSC
Total
addressable
entry level
annual pool
High school leavers and school leavers are typically
employed as entry level talent for call center and
transactional back-office work in Mauritius
1 Estimated based on assessment of total enrolments annualized over past 3 years and the structure of the education system
2 Tertiary graduates in Mauritius refer to graduates from government universities, private education and distance mode
64
2
However, the unique strength of Mauritius lies in its
bi-lingual skills…



Mauritius offers robust capabilities in both French and
English language skills
French is widely spoken in Mauritius
 Commonly used in day-to day communication
 Creole, the native language is very similar to French
and it typically requires 2-3 weeks of training time to
convert Creole speakers to French
 French spoken skills leveraged for call center work
English is the medium of instruction in schools and
universities
 English is also the official language for conducting
business
 As a result, the quality of written English tends to be
better than that of spoken English
 Written English skills are widely leveraged for nonvoice operations
 Some challenges with spoken English skills,
evidence of a ‘French accent’ that needs to be
neutralized
65
2
…which gives Mauritius a competitive advantage over
its peer group destinations
French language
proficiency
Mauritius
English language
proficiency
Low
Comments


Morocco



Egypt


South Africa


Tunisia



Senegal
High



Better French accent and cultural fit as French is widely spoken
with a neutral accent; However, 2-3 weeks of training on
business French/diction is required for native Creole speakers
Quality of written English tends to be better than spoken.
Spoken English even though fluent has a “French” accent
Large pool of French speakers
Some training required to neutralize “Arabic” accent;
accent is better suited for outbound campaigns
Limited English skills
~25% of the graduate pool is fluent in English
Limited French skills (3-4% of graduates)
Large pool of English speakers; high-quality English skills
due to the high-level of cultural affinity with UK
Limited French skills
accent better suited for outbound campaigns
Some training required to neutralize “Arabic” accent
Mauritius is well positioned to support Anglo-French markets that require both French and English languages
Note: These estimates represent the relative share of the population that is reasonably fluent in the language, and do not reflect the absolute
size of the pool
Sources: Everest Research Institute (2009); Interviews with recruiters; investment agencies and BPO suppliers
66
3
In addition, the talent pool has reasonably good
employability for IT/BPO
Typical employability percentage of
entry level talent pool in Mauritius
Call Center
(French)
Typical profile employed

20-25%



F&A
25-30%


IT
30-35%

A-levels
O-levels
Diplomas
University graduates (e.g.,
Accounting, Economics,
Finance, Management)
A-levels pursuing accounting
specializations (e.g., ACCA,
CIMA)
Engineering graduates
Technical diplomas with
certifications (e.g., CCNA,
MCSE)
Comments






Employability is comparable to other
locations (e.g., Morocco, Tunisia, Egypt)
that mostly employ tertiary educated or
equivalent profiles for similar roles
F&A courses are modelled on the British
system and impart industry-standard
practices
Good written English skills
Students opting for certification courses
(e.g., ACCA) have better employability
Suited to perform software
development work on relatively
common programming languages
Some pressures on talent due to
relatively small pool
Sources: Everest Analysis (2009); Interviews with recruiters and service providers
67
4
The Government and the industry are putting in place
multiple initiatives to enhance the quality of talent in
the IT-BPO sector

ICT Academy


24/7 Campaign


OTAM (Outsourcing & Telecommunications Association of Mauritius) is involved in creating an
ICT Academy with the Government of Mauritius, to cater to the sector’s talent needs
The Academy is envisaged to be a finishing school imparting skills-upgradation (“right-skilling”)
programs to make students more employable
 Students finishing their Higher School Certificate would be offered focused courses tailored for
the ICT sector
 Conceived to be set-up as a public-private partnership with the University of Technology of
Mauritius
 The ICT Academy would also offer training to people in Reunion and Madagascar to
supplement Mauritius’ talent pool
 The Academy is expected to train its first batch of 2,000 students before end of 2009
Conceptualized and initiated by the HRDC (Human Resource Development Council), the 24/7
Mauritius campaign is aimed at enhancing the competitiveness of Mauritius’ services-oriented
economy by making businesses ready for 24/7 operations
The campaign is aimed at sensitizing the workforce to the needs of a “24/7” economy
The campaign also empowers authorities to provide the necessary support measures in the
workplace to facilitate 24/7 operations
The IT-BPO sector is an attractive career option for most students and job-seekers in Mauritius
Sources: Everest Research (2009); HRDC, OTAM
68
Table of contents




 Costs
 Talent pool


69
Our risk assessment approach involves assessment of
risks across multiple risk categories
Key risk categories
(risk weights)
Description/key metrics used
Fresh talent
A
Labor
availability
(55%)
Overall risk
assessment
B
Infrastructure

Experienced
talent

Language/
specialized skills


Physical
infrastructure
(25%)
C
Environment
risk
Quality of life

International air connectivity (e.g., Paris)





Business risk
Legal and
regulatory risk
Business
environment risk
Scale and quality of French/English skills
Scale of specialized skills (F&A, IT)
Quality of infrastructure (rail, road etc.)
Network Readiness

Other
structural risks
(20%)
Geopolitical and
macroeconomic
stability
Scale of experienced talent by function


Connectivity
Annual entry-level talent pool as relevant
by function






Political Stability
Threat of natural hazards
Macro-economic stability
Crime rates
Enrolment in secondary education (%)
Quality of educational system
Legal framework
IP protection regulation
Corruption perception
Government Effectiveness
Ease of doing Business
Ease of starting a business
Risk assessment based on Everest’s proprietary methodology, involving quantitative and qualitative factors
70
Summary of risk assessment
Risk scores for French language work
(Index: 0 to 1, higher score implies higher risk)
Risk buckets
C
Other1 structural
B
Infrastructure
A
Labor availability
0.43
0.44
0.48
Morocco
Tunisia
Romania
0.59
Mauritius
0.65
Poland
0.70
Senegal
0.75
0.79
Lithuania
Egypt
Risk scores for English language work
Risk buckets
Other1
0.62
0.64
0.67
Egypt
Jamaica
Mauritius
0.78
0.80
Kenya
Ghana
0.41
structural
Infrastructure
Labor availability
South Africa
Mauritius is a relatively stable location with well developed infrastructure and conducive business environment
Challenges with relatively small scale talent pool
1 Other risks include geo-political, macro-economic environment, government support, ancillary support, overall business environment
risks and legal/regulatory framework
71
Good overall infrastructure and stable environment
Breakup of comparative risk scores
(Index: 0 to 1; higher score implies higher risk)
B
Connectivity risk
Environment risk
Physical infrastructure risk
Business risk
Infrastructure risks
Tunisia
Egypt
C
0.12
0.13
Other structural risks
Mauritius
0.10
Lithuania
0.11
Mauritius
0.14
Tunisia
0.12
Poland
0.14
Poland
0.12
Lithuania
0.14
Romania
0.13
Romania
0.15
Morocco
Morocco
0.15
Egypt
0.16
Senegal
0.16
Senegal
0.21
0.15
72
B
Drivers of infrastructure risk (page 1 of 2)
Physical infrastructure
Quality of infrastructure1 index (lower score implies higher risk)
(1=underdeveloped; 7=extensive and efficient)
2.30
2.50
Romania Poland
Good quality of commercial real estate,
roads and telecom network; some concern
over reliability of public transportation
2.70
2.90
3.30
3.40
3.50
3.80
Vietnam
Kenya
Senegal
Ghana
Morocco
Sri
Lanka
3.80
3.90
Jamaica
Egypt
Network Readiness index1 (lower score implies higher risk)
3.25
3.35
Ghana
Kenya
3.59
3.67
Morocco Senegal
4.50
4.50
Lithuania Mauritius
4.50
South
Africa
5.00
Tunisia
ICT conducive environment;
sharp rise in number of
internet and mobile users
3.76
3.79
3.79
3.80
Egypt
Sri
Lanka
Vietnam
Poland
3.97
4.03
4.07
Romania Jamaica Mauritius
4.07
South
Africa
4.34
4.40
Tunisia Lithuania
Mauritius has made significant investments in enhancing infrastructure for IT/BPO
Establishment of IT Parks (e.g., Ebene Cyber City)
 Telecom costs have been declining by ~30% each year. Connection to the fiber optic cable is expected to provide additional bandwidth and
further cost reduction

1 Based on World Economic Forum ratings
Sources: Everest Research Institute (2009); World Economic Forum (2008)
73
B
Drivers of infrastructure risk (page 2 of 2)
Connectivity and accessibility
NOT EXHAUSTIVE
Air connectivity to Paris, New York, and London
Duration of flight
to Paris (hrs)
N/A
3
3.5
4.5
3
5.5
12
9
Number of direct
flights to Paris
Average no.
of direct flights to
New York and
London
5
2
0
Lithuania
8
5
4
Morrocco
Tunisia
2.5
Egypt
1
Romania
Senegal
Mauritius
Poland
6
0
Lithuania
1
1
2
2
2
2
Morrocco
Tunisia
Egypt
Romania
Senegal
Mauritius
Poland
While Mauritius is well connected to international destinations, the average flight time (e.g., to Paris) is longer compared
to its North African counterparts (e.g., Morocco, Tunisia)
Sources: Everest Research Institute (2009); Travel Websites (Kayak.com, Expedia.com)
74
C
Drivers of environment risk (page 1 of 2)
Geo-political and macroeconomic stability
Political stability
(Percentile Rank; higher=better)
Sri Lanka
Kenya
Egypt
Morocco
Senegal
Jamaica
Tunisia
6
16
22
27
38
43
51
Poland
Mauritius
Lithuania
Jamaica
Tunisia 65
Egypt
Romania
831
Ghana
874
47
South Africa
53
56
Stable
democratic
system
South Africa
1,057
Senegal
1,137
Poland
1,234
Egypt
1,439
Morocco
67
72
75
Sri Lanka
Lithuania 60
Jamaica 86
51
Vietnam
Low risk of natural
hazards
Mauritius 10
Romania
Ghana
Macro-economic stability score
(Index: higher = better; 1 = low; 7 = high)
Risk of natural hazards
Deaths from Natural Disasters
1990-2009
1,735
Kenya
Vietnam
11,434
3.25
3.56
Ghana
3.91
Mauritius
4.03
Some
concerns
given high
fiscal
deficit
Kenya
4.37
Senegal
4.44
Morocco
4.73
Romania
4.85
Tunisia
4.87
Vietnam
4.91
South Africa
5,384
3.07
5.06
Lithuania
5.23
Poland
5.25
Fairly stable location; better positioned relative to peers especially in Africa
1 Based on World Economic Forum ratings
Sources: Everest Analysis (2009); World Economic Forum (2008)
75
C
Drivers of environment risk (page 2 of 2)
Quality of life
Crime rates per 100,000
inhabitants
2008; lower = better
Human Development Index1
(Index: Higher score = better)
Egypt 0.4
Morocco 0.5
Vietnam
Tunisia
Poland
Romania
1.1
1.2
1.6
2.5
Mauritius
2.5
Kenya
3.5
Sri Lanka
Lithuania
South Africa
Jamaica
9.4
38.6
49.0
2.3
49.3
Poland
2.5
Kenya
50.3
Vietnam
2.7
Morocco
52.4
Kenya
2.9
0.50
Senegal
Kenya
0.52
Ghana
Ghana
0.55
Morocco
0.65
South Africa
0.67
Egypt
0.71
Vietnam
0.73
0.74
Jamaica
0.74
Tunisia
0.77
Mauritius
0.80
Romania
0.81
Quality of educational system
(1 = does not meet the needs, 7 = meets
the needs of a competitive economy)
Romania
Senegal
Sri Lanka
6.7
Secondary education
enrolment
Percentage
23.8
Vietnam
64.5
Tunisia
84.9
Romania
85.9
Jamaica
87.1
Egypt
87.8
Mauritius
88.4
Senegal
3.3
Ghana
3.4
Morocco
3.5
Sri Lanka
3.8
Jamaica
3.8
Egypt
3.9
Lithuania
4.5
South Africa
94.7
Mauritius
4.5
4.5
Lithuania
0.86
Lithuania
98.8
South Africa
Poland
0.87
Poland
99.6
Tunisia
Secondary
education
is provided
free of cost
5.0
Safe location; also offers a good quality of life for expats, which is often a key consideration for investors
1 World Economic Forum rating reflective of multiple factors such as literacy rate, standard of living, etc.
76
C
Drivers of business risk (page 1 of 2)
Business environment
Corruption perception index
Higher score = less corruption
Mauritius
5.5
4.9
South Africa
Government effectiveness
Percentile Rank; higher = better
Ease in doing business
Percentile Rank; lower = easier
Lithuania
77
Mauritius
24
Mauritius
7
South Africa
75
Lithuania
28
Jamaica
11
32
Romania
26
Sri Lanka
29
Lithuania
4.6
Mauritius
72
South Africa
Poland
4.6
Tunisia
69
Romania
Tunisia
4.4
Poland
67
Jamaica
Ghana
3.9
Jamaica
Romania
3.8
Morocco
60
37
41
55
Poland
76
South Africa
55
Kenya
Senegal
3.4
Romania
53
Ghana
Sri Lanka
3.2
Sri Lanka
47
Vietnam
Jamaica
3.1
Senegal
45
Sri Lanka
Egypt
2.8
Vietnam
41
Egypt
Vietnam
2.7
Egypt
39
Morocco
30
Tunisia
Egypt
Ghana
Kenya
63
73
3.5
2.1
47
Tunisia
Morocco
Kenya
Ease of starting a business1
Percentile Rank; lower = easier
82
Senegal
Morocco
47
62
Lithuania
87
92
Senegal
102
114
128
149
74
95
Vietnam
108
Kenya
109
Ghana
Poland
137
145
Clear strengths in terms of its investor-friendly business environment and government support to ICT sector growth
1 Includes procedures, time, cost of starting a business and minimum capital required
Note: Based on World Economic Forum ratings
77
C
Drivers of business risk (page 2 of 2)
Legal and regulatory environment
IP Protection regulation
Index: 1 = weak; 7 = strong and enforced
Legal framework
Index: 1= inefficient; 7= efficient and follows a neutral process
Vietnam
3.0
Poland
2.9
Kenya
3.1
Senegal
3.1
Morocco
3.3
Romania
3.2
Ghana
3.3
Kenya
3.2
3.2
Poland
3.4
Jamaica
Senegal
3.5
Lithuania
Romania
3.5
Morocco
3.7
Jamaica
3.5
Sri Lanka
3.8
3.8
Egypt
3.6
Vietnam
Sri Lanka
3.7
Egypt
Lithuania
4.0
Ghana
Mauritius
4.1
Mauritius
Tunisia
South Africa
4.4
Tunisia
5.3
South Africa
3.5
3.9
4.3
4.7
4.9
5.2
Robust legal and regulatory environment in Mauritius; likely to be strengthened further through the Data Protection Act
Note: Based on World Economic Forum ratings
78
Mauritius provides attractive incentives for investors
ICT sector-specific scheme

Occupation permits granted to three categories; namely investors, professionals and self-employed

Multiple training related incentives available to investors under the HRDC Levy Grant Incentives Scheme
Fiscal Incentives





Indirect Incentives
Network of Double Taxation Avoidance
Treaties (DTA’s) with several countries

Free repatriation of profits, dividends and
capital
Income and corporate tax-rate of 15% (flat
rate for new companies after 2006 is15%)
VAT at 15% refundable; no capital gains tax;
tax free dividends



No min foreign capital required; 100% foreign
ownership permitted

Additional grants under the placement for
training scheme for unemployed youth as per
NEF’s scheme
Exemption from customs duty on equipment
50% annual allowance on declining balance
for the purchase of electronic and computer
equipment
Smooth process to facilitate set-up: Start
within 3 days for non-regulated activities and
15 days for regulated activities
Liberal policy and quick on granting work
permits
Sources: Board of Investment, Mauritius, HRDC; NEF; Everest Research (2009)
79
Also, Mauritius also offers attractive training
incentives for the IT/BPO sector
Levy Grant Incentives Scheme, Human Resource Development Council (HRDC)
The HRDC has been vested with the responsibility to administer, control and operate the National Training Fund. This
fund provides the necessary incentives to companies to develop their human resources. The HRDC has worked in
collaboration with the Mauritius Employers’ Federation and other stakeholders in developing the new schemes and
offers various types of training incentives to employers
Types of incentives that companies can avail include
 Support of training needs analysis
 Pre-operational training
 Multimedia facilities
 Use of foreign expertise
 Overseas training
 Financial Support to individuals following first Degree and those pursing Masters programs
 In-house training
Placement for Training Programme, National Empowerment Foundation (NEF)



The National Empowerment Foundation administers and operates the Placement for Training Programme
The Placement for Training Programme is one of the programs under the Empowerment Programme (EP). The
programme is designed to provide the unemployed with company placement coupled with a work-related formal
training so as to make them employable. At the end of the training, the employer has to offer employment to at least
75% of those who complete the program
The National Empowerment Foundation offers a one off contribution to the employer, to meet 60% of the costs of
formal training for each trainee and contributes on a cost sharing basis towards the stipend of the trainee for a
maximum period of one year
Sources: Board of Investment, Mauritius, HRDC; NEF; Everest Research (2009)
80
Table of contents






 Roles that Mauritius can play for global investors and supporting rationale
81
Cost-risk trade off across countries serving English
speaking markets
ENGLISH LANGUAGE WORK
Cost-risk comparison for potential countries serving English-speaking markets
Low-cost, stable
location suited to
support moderate-scale
centers (<500 FTE)
Low
Kenya
Philippines
Mauritius
Ghana
Egypt
South Africa
Jamaica
Cost
Low cost however, small
talent pool and relatively
less evolved infrastructure
Established low cost,
locations for mega
scale (multiple ‘000
FTE) operations
India
Native English-speaking
location; but relatively
higher costs
Large English-speaking talent
pool suited to support largescale centers (1000-2000
FTE), but relatively higher
cost
High
Low
High
Risk
82
Cost-risk trade off across countries serving French
market
FRENCH LANGUAGE WORK
Cost-risk comparison for potential countries serving French-speaking market
Low
Low cost but relatively
less evolved
infrastructure and small
talent pool
Cost
Mauritius
Lowest cost, stable
location, suited to
support moderate-scale
centers (~500 FTE)
Senegal
Morocco
Egypt
Lithuania
Tunisia
Poland
Romania
High
High
and relatively higher
costs
Scalable and stable
locations, but relatively
higher costs
Low
Risk
83
Roles that Mauritius can play for investors
Supporting rationale
1
French language
BPO
2
3
4
Bilingual BPO for
pan-European
multinationals
Small scale work in
some relatively
higher order work
Distinct role in
delivery network of
global companies
Distinctive ability to serve French language BPO work
 Lowest cost position amongst competitive North African locations
 Better accent and cultural fit
 Stable location with good quality infrastructure



Competitive advantage in terms of bi-lingual skills (French, English)
Significantly lower cost than competitive Eastern European (EE) locations
Some challenges in terms of not having multiple European language skills (beyond French)
when compared to other EE locations (e.g., Romania, Poland)
Opportunity to serve certain relatively high value areas in small scale (100-200 FTEs)
 IT; especially in helpdesk and software development in skills such as Microsoft, Java
 Back-office (F&A, HR); especially for transactional processes (e.g., invoice processing)
 Evidence of serving both French and English markets in these areas
A Regional delivery hub for Africa (e.g., shared services)
 Ability to support both North Africa (given French skills) and sub-Saharan Africa (given
English skills)
 Lowest-cost position among potential African sourcing destinations
 Stable location with good quality infrastructure
B Risk diversification / complementary location for India/Philippines
 Investors looking to diversify beyond India/Philippines
 Mauritius can complement scaled centers in India/Philippines. Examples
 Handling overflow volumes
 Supporting French-based work as part of global service delivery
84
1
French language BPO work
Lowest cost location for French skills
French speaking talent pool in reasonable scale
MARKET AVERAGES
Mauritius: Total annual addressable entry level pool
2008; ‘000s
FRENCH CALL CENTER
2-3
3-3.5
44-46
12-13.5
~60-65%
30-32
28-30
7
27-29
26-28
25-27
21-23
20-22
Tertiary
graduates 2
16-18
France Tier 2
Romania
Tunisia
Lithuania
Poland
Morocco
Egypt
Senegal
Mauritius presents significant arbitrage opportunity (~65% on operating cost basis) for French customers
Stable location with some risks on scalability of
talent
Employment distribution by source geography served
French-speaking
population of North
Africa and English
speaking population of
sub-Saharan Africa
100% = 10,400
1
Africa Others
Domestic
10%
Risk scores for French language work
3%2%
43% France
16%
French-speaking
population of Canada.
However, there is
evidence of U.S
focused work as well
SC qualified
but not
pursuing
HSC
High school leavers and school leavers are typically
employed as entry level talent for call center and
transactional back -office work in Mauritius
Mauritius
Experience serving French markets
HSC qualified
but not
pursuing
tertiary
education
U.S.,
Canada
19%
Largely nonvoice work
Largest market
served across
Contact center, BPO
and IT services
Risk buckets
0.43
0.44
0.48
Morocco
Tunisia
Romania
0.59
0.65
0.70
0.75
0.79
Lithuania
Egypt
Other1 structural
Infrastructure
Labor availability
Mauritius
Poland
Senegal
7%
UK
Benelux
Key Anglo-Franco
market
85
Bilingual operations for pan-European multinationals
Competitive advantage in bilingual skills
Offshore experienced pool with bilingual skills
French language English language
Comments
proficiency
proficiency
Mauritius


Morocco


Egypt


South Africa


Tunisia



Senegal



Low
High
Better French accent and cultural fit
Quality of written English tends to be better than
spoken.
100% = 10,400
Other langauges
Large pool of French speakers, however some
training required to neutralize “Arabic” accent;
1%
~25% of the graduate pool is fluent in English
Limited French skills (3-4% of graduates)
Large pool of English speakers; high-quality English
skills
34%
Bi-lingual
(English & 40%
French)
Some training required to neutralize “Arabic” accent
Only English
Low cost location for English skills
Lowest cost location for French skills
MARKET AVERAGES
Direct operating cost1 per FTE for English Contact Center services
2009; USD ‘000 per annum per FTE
Only French
25%
Mauritius
Mauritiusisiswell
wellpositioned
positionedto
tosupport
supportAnglo-French
Anglo-Frenchmarkets
marketsthat
thatrequire
requireboth
bothFrench
Frenchand
and
English
Englishlanguages
languages
MARKET AVERAGES
ENGLISH CALL CENTER
FRENCH CALL CENTER
66-70
54-58
44-46
~67-72%
~60-65%
Kenya
14-16
28-30
27-29
26-28
25-27
21-23
20-22
16-18
13-16
2
15-17
India
16-18
Philippines 2
17-19
Mauritius
18-20
Egypt
19-21
Jamaica
South Africa
Lithuania
UK Tier-2
21-23
Ghana
30-32
23-25
US Tier-2
2
France Tier 2
Romania
Tunisia
Lithuania
Poland
Morocco
Egypt
Senegal
Mauritius
86
3
Small scale higher-order work for Anglo-French
markets
Low-cost location for specialized work
Early evidence of niche work in some areas
MARKET AVERAGES
cost1
Direct operating
per FTE for IT Applications Development and Maintenance
Emerging offshore
destinations
destinations
Examples of relatively niche/domain-specific work delivered for offshore clients
Offshore financial services center of a
leading European Bank


41-43
41-43
40-42

37-39
33-35
30-32
25-27
22-24
21-23

Poland
Morocco
Tunisia
Romania
Egypt
Lithuania
Mauritius
Vietnam
India 2
Small scale of specialized talent pool…
Annual supply of engineering and IT1 graduates
2008; 000’s
52-54
Poland
35-37
South Africa
30-32
Egypt
27-29
Romania
Poland
147-49
62-64
60-62
South Africa
Vietnam
15-17
14-16
Morocco
Tunisia
10-12
Lithuania
15-17
Tunisia
15-17
Ghana
14-16
Kenya
7-9
6-8
Ghana
4-6
Sri Lanka
3-5
Mauritius
1.5-2.5
Kenya
Mauritius
The Fiduciary team provides middle-office
support services (e.g., accounting,
administration)

The private wealth management team
provides custodian, investment, portfolio
management services to high-net worth clients
taking advantage of the extensive range of
double taxation agreements available to the
entity.
The trust and securities team offers corporate
services, Fund services and Trust Services
backed by a supporting team providing
Statutory and Fund Accounting support
Typical employability percentage of
entry level talent pool in Mauritius


A leading European provider of worldwide
business communication solutions operates its
global service center from Mauritius
The team at Mauritius provides LI and L2
technical support for incident and problem
management
~150 FTE managing service desk, ~50
engineers for network deployment, network
optimization and IT security; ~50 FTEs
performing IP telephony support, maintenance
and upgrade functions
The talent pool employed are B.Sc graduates,
engineers, A-levels with specialist networking
certifications (e.g., CCNA, MCSE)
Call Center
(French)
Typical profile employed

20-25%


18-20

F&A
25-30%

13-15
3.5-4.5

1-2
Estonia
2-4
Jamaica 1-2
Sri Lanka
2-4
Estonia

Comments
A-levels
O-levels
Diplomas
31-33
Romania
Morocco
Lithuania
Team of over ~170 people
…but, with good employability
Annual supply of F&A graduates
2008; 000’s
Egypt
Managed services in communication network
solutions
IT
30-35%

University graduates (e.g.,
Accounting, Economics,
Finance, Management)
A-levels pursuing accounting
specializations (e.g., ACCA,
CIMA)
Engineering graduates
Technical diplomas with
certifications (e.g., CCNA,
MCSE)







Increasing
Increasingpropensity
propensityamong
amonggraduates
graduatesininMauritius
Mauritiustotopursue
pursueF&A
F&Aand
andIT-related
IT-relatedcareers/qualifications
careers/qualifications
F&A coursework is modeled on the
British system and impart industrystandard practices
Good written English skills
Students opting for certification courses
(e.g., ACCA) have better employability
Suited to perform commoditized
software development work on basic
programming languages and
databases
Pressure for talent due to relatively
small pool
87
4
Investors leveraging Mauritius in multiple ways
Examples of distinctive role in global services supply chain
A
Regional shared services hub for the African region
and parts of Europe





B
A leading global telecom equipment supplier
operates its shared services center for the African
region from Mauritius
Has selected Mauritius over other locations given its
bilingual skills, low cost s, stable business
environment, investor friendly policies, and favorable
quality of life for its expatriates
The 170+ strong team delivers transactional F&A
(AP, GL, AR). In addition, some higher-order
processes such as compliance, closing of books,
and management reporting are also delivered
Leverages technology (ebanking, ERP platforms) to
transmit high-volume of data/transactions
Complementing supplier’s global delivery network
in delivering IT projects



A couple of leading global suppliers leverage
Mauritius to support delivery of their projects for the
European market or French-speaking Canada
While a typical ‘follow-the-sun’ approach is used to
leverage Mauritius in certain projects, the
Frenchskills of Mauritians proves to be a distinctive
capability in other projects
The Mauritius center plays distinct roles in
 IT project areas that require good French
skills (e.g., reading technical specification
documents, interacting with French-speaking
client teams)
 French BPO including contact center (emails,
chat) and invoice processing
Employs B.Com graduates with ACCA/CIMA
qualifications
88
Table of contents






 Key data tables
 Glossary
89
Salaries for French Call Center Work
MARKET AVERAGES
Average annual salary by role (including benefits and bonus)
2009; US$ ‘000 per annum
Entry-level agent
Sr. Agent
Supervisor
Senegal
4-5
Senegal
6-8
Senegal
Mauritius
5-6
Mauritius
6-8
Mauritius
Tunisia
6-8
Tunisia
12-14
Tunisia
Egypt
7-8
Egypt
11-13
Egypt
Lithuania
8-9
Lithuania
Romania
9-10
Romania
Morocco
10-11 Morocco
Poland
13-14
Poland
16-18
14-16
12-14
17-19
Manager
9-11
Senegal
11-13
Mauritius
16-18
19-21
Tunisia
Egypt
Lithuania
21-23
Lithuania
Romania
20-22
Romania
Morocco
17-19
Poland
Morocco
27-29 Poland
13-15
30-32
25-27
28-30
39-41
35-37
29-31
35-37
Sources: Everest Research Institute (2009); Recruiter interviews; salary survey inputs
90
Salaries for English Call Center Work
MARKET AVERAGES
Entry-level agent
Sr. Agent
Supervisor
6-7
Manager
Mauritius
5-6
1st Qtr
Jamaica
5-6
2nd Qtr
Kenya
5-6
3rd Qtr
6-7
3rd Qtr
Ghana
5-6
4th Qtr
7-8
4th Qtr
11-12
4th Qtr
Egypt
6-7
5th Qtr
7-8
5th Qtr
11-12
5th Qtr
Lithuania
6-7
6th Qtr
South
Africa
7-8
1st Qtr
9-10
10-11
13-14
11-12
15-16
2nd Qtr
6th Qtr
8-9
2nd Qtr
3rd Qtr
15-16
30-31
1st Qtr
6th Qtr
25-26
17-18
33-34
25-26
27-28
19-20
44-45
91
Salaries for Finance and Accounting Work
MARKET AVERAGES
Entry-level agent
Sr. Agent
Supervisor
Manager
Mauritius
6-7
1st Qtr
9-10
1st Qtr
13-14
1st Qtr
Kenya
6-7
2nd Qtr
9-10
2nd Qtr
12-13
2nd Qtr
Egypt
7-8
3rd Qtr
9-10
3rd Qtr
Lithuania
7-8
4th Qtr
9-10
5th Qtr
Romania
10-11
6th Qtr
Morocco
10-11
Jamaica
10-11
South Africa
Poland
16-17
12-13
14-15
18-19
19-20
13-14
4th Qtr
5th Qtr
15-16
3rd Qtr
18-19
4th Qtr
26-27
34-35
31-32
26-27
22-23
54-55
5th Qtr
42-43
6th Qtr
6th Qtr
64-65
28-29
16-17
21-22
43-44
19-20
37-38
49-50
92
Salaries for IT Applications Development and
Maintenance (ADM) Work
MARKET AVERAGES
Entry-level agent
Vietnam
Mauritius
5-6
1st Qtr
8-9
2nd Qtr
Egypt
10-11
3rd Qtr
Lithuania
11-12
4th Qtr
Sr. Agent
Supervisor
6-7
1st Qtr
2nd
Qtr
13-14
8-9
1st Qtr
21-22
20-21 3rd Qtr
15-16
4th Qtr
Manager
32-33
17-18
2nd
Qtr
49-50
3rd Qtr
51-52
4th Qtr
Romania
16-17 5th Qtr
24-255th Qtr
34-35 5th Qtr
Morocco
17-18 6th Qtr
6th Qtr
31-32
6th Qtr
54-55
Poland
17-18
26-27
38-39
17-18
25-26
58-59
71-72
60-61
93
Table of contents






 Key Data Slides
 Glossary
94
The research used four key types of input sources
Description

Questionnaires
Qualitative
interviews

Interviews with
potential
investors

Everest’s
knowledge and
IP


Questionnaires to 33 leading players to better understand scope of current
delivery
 Represent ~70% of the overall market
 Players with scale >100 FTE
 Representative of all key IT/BPO segments
Interviews with 20 players to understand maturity of the industry and their
experiences
 Mix of global suppliers (e.g., Accenture, Ceridian), regional/local suppliers
(e.g., Infinity BPO, Rogers, Euro CRM) and captives (e.g., DHL)
 Interviews with other key market participants (universities, training
providers, recruiters, telecom operators)
Interviews with 5 market participants who are not currently in Mauritius to
understand their perceptions (demand-side view)
Everest knowledge and IP: proprietary cost models, data on 150+ offshore
locations (costs, talent pool, risks etc.)
Relationship with agencies, recruiters in 150+ locations for an ‘on-the-ground’
perspective
95
List of questionnaire participants
Global players
players
Global
Global suppliers
 Accenture Mauritius
 Ceridian
 Hinduja
 Infosys
 Intelenet Global
Offshore captives
 Axa Assistance
 Asset IV
 DHL
 Deutsche Bank
 Huawei
 Orange Business services
 Thomson Digital
 TNT Document Services
Rationale for selecting the
companies indicated


Global players
Regional
and local suppliers










Apollo Blake
Airmate Ltd
ABC Datacall
Euro CRM
Evolution pre-press
Infinity BPO
Rogers Outsourcing Solutions
ProContact
Resaplanet Ltd.
Vinivi Ltd.










Astek (Mauritius)
Batch Image Processing
Diadeis
Dodo Outsourcing
MMS Ltd.
Parfip Mauritius
TNC Consulting
TheoFinance
Satim Ltd.
Valldata Services


33 companies represent ~70%
of market
Representative of all key
IT/BPO segments in Mauritius
Includes all players with scale
>100 FTEs
Also includes few players
(<100 FTEs), who perform
niche/complex work
96
List of interviewees
Global players
players
Global
Global suppliers
 Accenture
 Ceridian
 Intelenet
 Infosys
Offshore captives
 Deutsche Bank
 DHL
 Huawei
 Orange Business Services
 TNT Document services
Global players
Regional
and local suppliers
Scaled suppliers
 Infinity BPO
 Rogers Outsourcing
 Euro CRM
 ABC DataCall

Niche suppliers
 Airmate/Maureva
 Asset IV data services
Superfund
 Theofinance

21 interviews across these
segments
Representative of IT/BPO
segments and types of players
in Mauritius
Globalmarket
players
Other
participants





Data Protection Office
HRDC
National Empowerment Fund
Recruiters (DCDM Consulting) and trainers (Cyber IT Services)
University of Technology Mauritius
97
Table of contents






 Key Data Slides
 Glossary
98
Overview of commonly used terminology in IT-BPO
Functional groups
BPO
Voice
(Front office)
Non-voice
(Back office)
Call Center
Sub-functions



Corporate
services

Industry-specific
back-office

KPO








Infrastructure
Management

ADM

Others


Others
IT





Processes
Inbound
Outbound
Technical Helpdesk
Finance & Accounting
Human Resources
Procurement
Insurance
Travel
Telecom
Policy
Product
Claims
Business
development origination servicing processing
Data Management
Document Management
Investment Research
Transcription
Disaster Recovery
Web hosting
RIM
Application development
Application Maintenance
Multimedia, Animation
Graphic Design
Engineering Services
Architecture services
99
Glossary of key terms used in this report (page 1 of 3)
Term
Definition
Back-office
functions
All non-customer facing services including corporate services, knowledge services and industryspecific services
BPO
Business Process Outsourcing refers to the contracting of some or all business processes to
service providers
Buyers
Buyers are companies/entities that purchases offshoring services from a supplier of BPO
services. In the case of captive BPO providers, the buyers are the parent company which are
referred to in the report as parents
Corporate
services
Back-office functions including Finance & Accounting (F&A), Human Resources (HR) and
Procurement
Domestic
captives
Domestic captives refers to 100% subsidiaries of companies in South Africa, which provide services
exclusively to the parent company
FAO/F&A
Finance & Accounting Outsourcing refers to the transfer of ownership of some or all finance and
accounting processes or functions to providers. This could include administrative, delivery or
management-related processes or functions
100
Term
Definition
Front-office
functions
All customer facing services including general query handling, after-sales support, and sales and
marketing services
FS
The Banking, Insurance and Asset Management sub-verticals collectively referred to as Financial
Services (FS)
FTE
Full-Time Equivalent. An effort equal to one employee working 100% of the time
Global Sourcing /
Offshoring
Transferring business process activities or its complete ownership to a different country from the
country (or countries) where the company receiving the services is located is referred to as
offshoring or global sourcing
HRO
Human Resources Outsourcing is the transfer of ownership of some or all human resources
processes or functions to providers. This could include administrative, delivery, or managementrelated processes or functions
Industry-specific
services
Industry-specific BPO refers to BPO offerings that require a high degree of vertical-specific
knowledge and that are not easily replicable across industries such as claims processing for the
insurance industry and credit card collections for the credit services industry
Infrastructure
Infrastructure refers to the availability of basic services and social capital necessary to support BPO
delivery from a location. Infrastructure includes physical infrastructure elements such as the
availability of transportation services, real estate, facilities management, catering, security services,
and recruitment agencies and social infrastructure such as availability of schools, hospitals, and
entertainment options
101
Term
Definition
Insurance
The Financial Services sub-vertical that includes life & pensions, property & casualty, and health
insurance
Knowledge
services
Knowledge services refers to offshoring of some or all knowledge-intensive services such as business
research, market research, data management, data analytics, and legal and IP support to providers
Labour arbitrage
Savings gained during offshoring due to the difference in the labour costs between the source and
destination locations
Offshore captives
Offshore captives refers to 100% subsidiaries of multinational companies in an offshore location,
which provide services exclusively to the parent company
Procurement
services
Procurement services is the transfer of ownership of some or all procurement processes or
functions to providers. This could include administrative, delivery, or management-related
processes or functions
Service providers
Service providers in this BPO report refers to third-party suppliers as well as offshore captives
Service offerings
Service offerings refers to BPO offerings across horizontal BPO and vertical-specific BPO offerings
Sourcing models
Sourcing models refers to the offshore business models adopted by buyers and includes the
offshore captive model, third-party vendor offshoring, and other hybrid models
Third-party
supplier
Third-party suppliers or vendors are companies/entities that supply outsourcing/offshoring
services to other companies/entities (buyers)
102
Table of contents






 Key Data Slides
 Glossary
103
Acknowledgements
We would like to thank the following organizations for their assistance/participation in the study
Service providers
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

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
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Accenture Mauritius
Axa Assistance Indian Ocean
Ceridian Mauritius
Infosys Mauritius
Intelenet Global
Orange Business services
DHL
Thomson Digital
Deutsche Bank
Huawei Shared Service Mauritius
TNT Document Services
Rogers Outsourcing Solutions
Euro CRM
ProContact
Infinity BPO
Apollo Blake
Airmate Ltd
Satim Ltd.
Batch Image Processing
Valldata Services
Theofinance
Asset IV Data services
Parfip Mauritius
MMS Ltd.
Dodo Outsourcing
Evolution Ltee
Heaven Multimedia
Other organizations associated with the IT-BPO sector

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

Ministry of ICT, Government of Mauritius
Board of Investment (BOI)
National Computer Board (NCB)
Human Resource Development Council (HRDC)
National Empowerment Foundation
Commissioner, Data Protection Office
OTAM
DCDM Consulting and Recruitment Services
Cyber IT Training Services
University of Mauritius
University of Technology, Mauritius
104
Authors
Everest Group is a global consulting and research firm that comprehensively serves the
outsourcing and offshoring market. An industry leader since creating the sourcing
consultancy practice in 1991, Everest has earned a worldwide reputation for ongoing
innovation by helping clients capture optimum value through sourcing strategies and
implementation. Everest provides information, insight, and advice to help buyers,
suppliers, and enablers of services effectively navigate all stages of the sourcing lifecycle.
Committed to thought leadership, Everest is noted for its fact-based analyses and insights
on the outsourcing and offshoring marketplace.
Everest Group has extensive experience working with country associations and investment
agencies. Everest partnered with Nasscom to develop the roadmap for the Indian BPO
industry, engaged with the South African BPO program since 2007, created a whitepaper
on Bogota’s potential as an offshore location, and recently authored a BFSI BPO report.
Everest Group Website: www.everestgrp.com
Everest Research Institute: www.everestresearchinstitute.com
Report authors:
1. Nikhil Rajpal ([email protected])
2. H. Karthik ([email protected])
3. Shyan Mukerjee ([email protected])
4. Arshmeet Ahluwalia ([email protected])
105
Get the answers today that lead to tomorrow’s
success
Everest has the resources, experience, and capabilities to provide our clients the
appropriate consultancy services support coupled with the strategic intelligence, analysis,
and insight that are crucial to making the right decisions in today’s environment.
With the vision of our leadership team, the personal commitment, and the passion of our
professionals to deliver real value to our clients, our organization is unsurpassed in its
ability to help guide your company’s future success.
Everest Global
Two Galleria Tower
13455 Noel Road, Suite 2100
Dallas, TX 75240
U.S.A.
+1-214-451-3000
www.everestgrp.com
www.everestresearchinstitute.com
Everest India
Ground Floor, Tower A
Unitech Business Park
South City - I, Gurgaon
National Capital Region
India 122001
+91-124-304-1000
Everest Australasia
409a Wattletree Road
East Malvern
VIC 3145
Australia
+61-3-9509-3933
Everest Group
150 E., 52nd Street, 16th Floor
New York, NY 10022
U.S.A.
+1-646-805-4000
Everest Canada
The Exchange Tower
130 King Street West,
Suite 1800
Toronto, ON
Canada M5X 1E3
+1-416-865-2033
Everest UK
1st Floor, Accurist House
44 Baker Street
London, W1U 7AL
United Kingdom
+44-870-770-0270
Everest Netherlands & Continental Europe
Atrium Building 3rd Floor
Strawinskylaan 3051
1007 ZX Amsterdam
Netherlands
+31-20-301-2138
Everest Australia
Level 6, 90 Mount Street
North Sydney
NSW 2060
Australia
+61-3-9509-3933
106

Mauritius as an Emerging Location for Delivery of Offshore Services

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