Indian BPO firms see growth in Latin Americanoperations

here is the story from Times of India of 19 November

After making a splash in US, European and Japanese markets, Indian ITeS companies are now ready to do Samba in Latin America.

The past two years have seen many of them set up shop in countries like Chile, Brazil, Argentina, Uruguay and Mexico. From TCS to Satyam, Evalueserve to 24/7, Indian companies have now opened development centres or acquired companies all across Latin America.

And what's driving them is the fact that the continent is one of the fastest-growing region for contact centres. Experts say, expansion to Latin America is a logical step for Indian companies looking to globalise their operations. Two main reasons are driving the growth, says Ameet Nivsarkar, V-P, Nasscom. "It helps Indian ITeS companies to service the larger Spanish speaking population in the US. They find it easier to attract Spanish speaking talent in Latin America compared to India. Also, even though Latin America does not have the depth of talent like India, it has sufficient expertise to complement the India story."

In fact, research done by ValueNotes reveals, the number of call centre agents working for outsourcers in Mexico will grow to 85,000 by 2010, and in Brazil it will increase to 12,000 in the same period. Already, Indian companies working there are scaling up operations. Evalueserve's Chilean delivery centre which started with approximately 15 employees, is expected to employ a few hundreds in the next two to three years. Subsequently, they will add around 60 professionals every year. The company believes the country could represent 10% of global revenues by 2008, and also add business for the India and China operations, said Robert Daigle, V-P at Evalueserve.

Nearness to US is a major attraction for Indians. "For us Chilean centre helps in dealing with workload for it is in the same time zone. Besides, Chile is a part of the global delivery platform for our clients," says Ashish Gupta, COO, Evalueserve. While costs (especially salary costs) in the region are higher compared to India, they are still lower than those in the US. Besides, bandwidth costs in Latin America are lower than in even India because of its proximity to the US. "Although the market may not be as big as the US or Europe, it's still big enough to keep Indian companies engaged," says Nivsarkar. Also, lower valuations of Latin American companies make the entry of Indian vendors relatively easier. Since economies there are 'yet to arrive,' it creates good acquisition opportunities for cash-rich Indian vendors.