Four years ago, the country was optimistic about BPO operations, with the cost of connectivity set to come down with the entry of fiber optic cables. Reliance on satellite had been cited as a major hindrance to BPO growth and profitability and the formation of the Kenya ICT Board was seen as a major marketing avenue.

The World Bank also weighed in with a grant that was expected to benefit the BPO sector. However, it took two years before the grant was disbursed and in the process some companies had collapsed or explored other business ideas.

"Unfortunately the initial subsidy investment did not deliver any benefits that can generally define the industry; we realized this just in time and restructured the support to focus on sector development," said Eunice Kariuki, Marketing Director, Kenya ICT Board.

Even with cheaper connectivity, the BPO sector was unable to compete with India, Mauritius and South Africa because the focus was on voice and contact sector services. The board, however, has had challenges working with BPO operators to expand operations from traditional data entry and customer care to IT enabled services and software development, which calls for higher skills set and longer periods of marketing and getting clients.

This has forced the board to focus on sectorwide initiatives like BPO training, software certification and business incubation.