The submarine cable infrastructure area faces a new era marked by the entry of Internet players, such as Google, Facebook and Microsoft, now also owners of transoceanic or regional lines. Latency became crucial for video streaming and gaming, well above capacity. In this changing environment, Carmine Sorrentino, the company's Executive VP for Latin America, explained to Convergencialatina how Sparkle is restructuring its presence in Latin America, anticipating the end of the useful life of the SAC cable and other cables that were built in 2000.
Convergencialatina: Sparkle purchased a fiber pair from Google Curie. What are they aiming to do with this incursion?
Carmine Sorrentino (CS): We were interested in having a “highway” between Latin America and the United States to meet latency demand. With the addition of Curie in our existing network, the arrival of content and latency from many Latin American countries totally changes, especially towards the United States and Asia. Our participation in Curie is part of Sparkle's plan to implement new segments on our submarine cables, taking into account that the SAC and other submarine cables in the region will reach their useful life in the short term. Therefore, it is necessary to restructure our backbone in the region.
With the same objective the company in the past acquired part of the Pacific Caribbean Cable System (PCCS). And in 2017 we bought three pairs of fiber in Seabras-1, between Brazil and the United States.
Convergencialatina: Can you tell me about the differences you see between the 2000 submarine cable market and the current one?
CS: Regarding the design of cables, cables like the Seabras-1 or the Curie do not drop at each point, and this reduces costs. On the other hand, a large part of international traffic is currently handled by OTTs: this not only takes away a percentage of the traffic from traditional cable operators, but these actors began to build their own cables. As a result, high cost and magnitude projects, such as the SAC or SAM, can hardly be done at present. This leads to the multiplication of agreements between international carriers and OTTs.
Twenty years ago, the traffic that stayed in Latin America was 15% to 20%, and the remaining 80% went through the United States. With the implementation of peering and the emergence of OTTs, the percentage that stays in the region exceeds 60% on average. In Brazil, for example, this figure is even higher: due to language reasons, traffic stays locally even more. To face this scenario, the IP backbone of a carrier like us must be very good and have content for Latin America.
Convergencialatina: Can you tell me about the value on latency and how does the gaming boom impact the scenario, especially in times of quarantine?
CS: Before you looked at the capacity of a submarine cable. Now the fundamental thing is the latency and the arrival to the content. Today much of the traffic driving demand is video gaming, and live apps, for which latency is an important factor.
Since the start of the pandemic, we have observed an increase of over 30% in international IP traffic in Latin America.