The decision of Stream Global Services to expand its offshore footprint into Egypt, of all places, is seen by Ovum (News - Alert) analyst Peter Ryan as a, "validation of Ovum's longstanding view that this country has a significant role to play in the delivery of customer-facing services to Western end users."

Admittedly, Egypt doesn't pop to mind as readily as India or the Philippines when it comes to BPO for Western companies. To attract critical mass similar to those places, Ovum thinks, Egypt's BPO leaders, "must emphasize its value to the North American market, which has proven a tough nut to crack."

Ryan pronounces Egypt "competitive" in price and labor skills, pointing out that offshore contact center outsourcers, most recently Stream Global Services., have used Egyptian vendors: "Its labor pool scalability, language skills, and government support for the sector have been crucial to this development."

To date, Egypt has mainly focused on Western Europe, Ryan notes, adding that they need to do a better job in North America.

Granted Ovum's been touting the potential benefits of Egypt in a delivery strategy for some time, and the analyst firm believes the country's fundamentals still serve it well: "With a population in excess of 80 million -including a large number of university graduates, Egypt's labor pool cannot be ignored in an era in which quality offshore labor is hard to find."

Complementing this are the excellent language skills that can be found in Egypt, most notably in Cairo, Ryan says, adding that Egyptian firms can offer agents handling volumes of calls in English, French, Italian, Spanish, and German.

So while there's a fundamental base in Egypt for an offshore destination, "Egypt's government and private sector must work together to achieve two important goals," Ryan says:

"The first goal is to overcome negative perceptions in North America about Egypt's stability, which are due to its geographical location… there are concerns about terrorism and the safety of Western business people."

Also, "Egypt's contact center sector needs to promote its ability to deliver services in North American Spanish. The US Hispanic market is gaining importance in terms of both size and purchasing power, and if CRM outsourcing vendors are to be lured into Egypt there must be confidence that both North American English and Spanish can be handled at an advanced level."

One would be hard-pressed to decide which is the more difficult task.