Peru challenging Colombia's IT service rise, analyst says

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Thursday, February 17, 2011

Government support has given a shot in the arm to Colombia's nascent position as an IT hub, but the local industry is increasingly seen on a collision course with neighboring Peru, Frost & Sullivan research analyst Jennyfer Vélez told BNamericas.

Colombia's edge comes from a combination of convenient geographic positioning in the middle of the Americas, a larger pool of skilled personnel and connection to the Globenet submarine cable, according to Vélez.

"But I think that in all of Latin America, Peru is generating the toughest competition for Colombia," she said. "Peru's [duty-free zone] Zofratacna is wooing foreign investment with very competitive prices and costs that are much lower than can be found in Colombia, particularly in the IT and contact center spheres."

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Colombia's IT success is contingent upon government support, the analyst noted.

"The Colombian government has shown significant interest in creating awareness to welcome IT in the country," she said. "This trend was also evident in the recent elections, during which each presidential candidate included IT adoption strategies within their development plans."

Last year, Colombia's government created a US$30mn fund to stimulate IT development in 2010-11. Telco Telefónica Colombia committed to matching the fund 1x1, bringing the total amount available to US$60mn.

Investment focus areas will include creation of mobile applications, software for mini and SMEs, and applications for digital TV.

REGIONAL SCENE

Vélez said Latin America's IT infrastructure services and managed security services rose 12.2% and 17.8% last year, respectively.

"We believe that in 2011, the IT service market will see growth figures similar to those recorded last year," she said.

The analyst was unable to provide figures specifically on Peru or Colombia, but noted that security services and also cloud computing have emerged as overall drivers.

"Colombia is one of the countries with the best investment climate," the analyst said. "Behind that, there are various proposals to regulate and facilitate IT adoption and, most recently, to regulate the cloud."