Indian IT services major TCS will open a global delivery centre in Mexico next year.
Satyam Computer Services will also open an office in Mexico. These firms are leading an Indian commercial exploration of South America, and they believe they will soon have company from the subcontinent.
The Indian IT industry is venturing into Latin America to be closer to clients in the United States, but finds the local market could be attractive as well.
When Gabriel Rozman visits the TCS office in New York, he's in a closer time zone to his office back in Uruguay than to his company's headquarters in India. That's one of the reasons why Latin America is emerging as a new frontier for the Indian IT industry, which is seeking to service its biggest market, the United States, more efficiently.
President, TCS Iberoamerica, Gabriel Rozman told SAW, "We are thinking that if you are in the same time zone, you can replace a lot of the onsite work with near shore staffing. In that sense, I think the companies are willing to pay a premium over what they pay India, to be in this time zone. And we charge that premium because our costs are higher than in India."
TCS' IberoAmerica division, which operates in the Spanish and Portuguese speaking regions of the world, set up its first office in Latin America four years ago. Today, it has a staff of 3,500 on the continent, runs Global Delivery Centers in Brazil, Uruguay and Chile; and will open one in Mexico next January.
Satyam followed TCS into Latin America two years ago, opening shop in Sao Paulo, Brazil. While the company has onsite staff in various Latin American countries servicing existing clients, it also plans a big push into the local market, pointing out that Brazil's IT services market alone is estimated to be worth $17 billion.
President, Satyam Computer Services, Ram Mynampati says, "What we are looking at is the need to expand outward in Latin America, into Mexico and Argentina, into other regions of the Caribbean in order to service the broader Latin American market. So, in the not too distant future, in the next two - three years, it's likely that we will have about a thousand people servicing the Latin American market."
Indian-owned BPO firms in the US are also heading south. 24/7 Customer opened a call centre in Guatemala earlier this year, and plans more centres in El Salvador, Argentina and Chile.
Co-founder and CEO, 24/7 Customer, PV Kannan says, "Right now, about 20 per cent of the US population identifies itself as Hispanic. It's also one of the fastest growing population segments. If you look at the immigration rate which is about a million people a year, again most of the immigrants are Hispanic."
Latin America is not yet considered a rival to the Indian IT services and BPO industry, as it's still easier and cheaper to service most clients from India. But the Indian pioneers in Latin America are convinced their competitors cannot ignore the continent for too long.
As the advantages of operating from Latin America become clearer, we'll soon find more Indian companies saying: Se habla espanol, which means 'we speak Spanish'!
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