The Rise of Latin American Based BPO Providers

Dec 17, 2014

There are not many industries, except for commodities, where you can find 2 Latin American Providers among the TOP 5 players worldwide. However, the BPO CRM space is one of those.

Atento, the largest provider in Latin America and Spain, employs approximately 153,000 people. Grupo Contax (Contax Group), the biggest outsourcer in Brazil, is almost as big as the former, with 110,000 employees even though it has operations in only four countries (Brazil, Argentina, Colombia and Peru)

Both companies recently reported their third quarter results which confirmed they will keep consolidating its leadership position worldwide. While Atento quarterly revenues grew 5.9% on constant currency basis, achieving 1.74 billion USD during the first nine months of 2014; Grupo Contax Net Operating Revenue (NOR) was down by 6% compared with 3Q13, but if measured quarter over quarter, those revenues rose by 2%. First nine months for Grupo Contax showed revenues of 2.59 billion Brazilian reais (over a billion USD)

Atento continued to diversify its client base in the quarter, with non-Telefonica revenue accounting for 54% of total revenue, an increase of 3 percentage points over the same period last year. They have also reported the sale of its operations in the Czech Republic to Comdata SPA, which allows the company to continue strengthening the focus on its core markets (LatAm as well as Spain and Morocco in the EMEA region)
Another smart move from this company, was the recently approved acquisition of Casa Bahia Contact Center in Brazil (Casa Bahia is one of the biggest consumer electronics stores from Brazil) On top of that, Atento and Via Varejo (the owner of Casa Bahia and other stores such as Ponto Frio) signed a five-year agreement for the provision of call center services for the entire organization.

Grupo Contax third quarter was a milestone as it represented the end of a restructuring process started in 2013 aimed to bring significant improvement in the financial performance of their Brazilian operations. If 2014 ends up by not being a bright year for the company, is certainly because Grupo Contax is still in a transition period, even probably migrating to a new logo or brand (though this is not yet confirmed). However, we expect the company to focus on keep enlarging its Latin America footprint while expanding its services and increasing efficiencies in Brazil during 2015.

What both companies have in common, besides the fact of being Brazil its key revenue generator market and their high dependence of the Telecom Vertical segment, is that they want to penetrate the US Market. At this moment, Atento has taken the lead, as they have a flagship presence (two delivery centers in San Antonio, Texas) and is pushing hard to win new logos to serve the US Market from their delivery centers in Central America.

Grupo Contax does provide services as well to the US from its Colombian delivery centers, but the amount is very limited so far. However, the company has conducted some exploratory missions to the US and Mexico during this year, in order to further expand opportunities on those markets but nothing has been announced after that so far.  Will Grupo Contax continue fostering their growth through near-shoring campaigns? Is Mexico the next market for Grupo Contax as they will be able to provide services to the US but also attend the growing Mexican domestic market?

One way or the other, we can confirm that the US Market is certainly the next stop for the two rising Latin American BPO Providers. So, if you are in the US, get used to Atento and Grupo Contax. You will be hearing from them sooner than later.

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