Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, January 29, 2019

Create networks and connectivity with a geopolitical meaning

In an interview with Convergencialatina, Horacio Martínez, president of Grupo Datco, explained the way he and his company deal with business. The recent alliance with Angola Cables is an example of the sense of opportunity and see Martínez’s thoughts for the future as well as what he transmits to his entire team.

Grupo Datco is an Argentine company that grew on the basis of agreements and negotiations. Its leader, Horacio Martínez, is a troubadour, an optimist and an effective discoverer of opportunities. Adversity is, for Martínez, a refined fuel that puts him on the lookout for opportunities to develop as a businessman and to position his company in a dynamic and challenging market, such as ICT (Information and Communication Technologies). The recent strategic alliance between Silica Networks - a Grupo Datco company - and Angola Cables is just one example that reveals this constant exploration that does not end with the business growth, but always - in the case of Martínez - is nourished by pioneering and challenging ingredients: this agreement will allow us to create a New Southern Route, a high-capacity fiber optic network that for the first time will connect South America with Africa and Asia.

Argentina will be able to communicate with the great countries of the East, passing through Africa. "The Angolans, through their agreements with Monet and WAST cables, are coming to the East at very competitive prices; in addition to being a shorter section reduces latency," explained Martinez to justify his interest in this connectivity route.

The New South Route will interconnect the networks of both companies, and will have access to the Pacific through Santiago de Chile, the Atlantic through Fortaleza in Brazil and through Las Toninas in Buenos Aires; and from there to the world through transcontinental submarine cables. That is to say, it will come out of the conventional way of reaching Europe through the United States through the North Atlantic. Instead it will cross the South Atlantic, bordering Africa to reach Europe and arrive in the East by the Indian Ocean.

Martinez found that joining with Angola Cables would give him speed, security and a 60% lower latency to reach countries like China, compared to opting for routes of the Atlantic and the Northern Hemisphere. And since he is convinced that his clients and the evolution of international trade need fiber he did not hesitate to almost unintentionally close this agreement during the last Futurecom, held in San Pablo, Brazil.

Figurines"Have you ever played the figurines?" Martínez asked to explain in a simple way the strategy of being a Carrier with 12,000 Km of optical fiber of which less than 10% are networks mounted by them. It is about exchanging what one has for what the other does not have, and only building where the equation requires it, either because it is strategic, or because there are no lines or because the agreements that can be celebrated do not add up or are not beneficial enough. With this reasoning, Grupo Datco faced three crossings of the Cordillera connecting Argentina and Chile through the south, center and north.

The "figurine" that Angola Cables had was difficult and Martínez wanted it. It is the route to the country with the most disbursements in the region: in 2017, Foreign Direct Investment (FDI) in Latin America was led by China with 42%, totaling close to US$ 18 billion. "We are trafficking with China more and more. There is a commercial war between the United States, the East and Europe; and Argentina competes with the United States for primary goods that the Chinese lack," said the president of Grupo Datco and CEO of Silica Networks.

In recent years the three giants of the East - China, Japan and Korea - multiplied the trade with South America, and in the era of the Digital Economy is expected to increase the exchange of digitized information. "With this alliance we will continue with the tradition of making our line a unique business differential," said Martínez.

A differential that hopes to nourish itself from the most remote corners of South America is the Atacama Large Millimeter/submillimeter Array (ALMA), an observatory whose activity produces an enormous amount of terabytes of plausible data to be transmitted to Europe, North America and Asia. "They need fiber and now they can go through the Capricorn line and through Angola towards the East and the rest of the world," Martínez talked about the connection that goes from the Atacama Desert (Spanish: Desierto de Atacama) in Chile, which connects with Brazil over the Tropic of Capricorn, through the north of Argentina. Also think about the Chinese space station located in the village Bajada del Agrio in the province of Neuquén; in the increasing traffic of primary goods from Chile to China, in the disbursements that large Asian equipment and network infrastructure companies are making in the region; and above all, when there is a strong price war in the wholesale connectivity capacity market that will begin in Brazil and that sooner rather than later will arrive in Argentina.

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