Carriers Map in Latin America 2021 - Credit: © 2021 Convergencialatina
The search for alternative paths for underwater footprint is based on the need for direct routes -such as the one generated by EllaLink between Brazil and Europe- and there is even a geopolitical weight of its own: it is expected that in the coming years the countries will yearn for greater control of the data they generate, to the point that it will not be possible to access all the data on any route. The "delay" in traffic will be unacceptable, so latency and most diverse and interchangeable routes will become currencies in the subsea infrastructure industry. In this sense, the Humboldt cable, the transatlantic-scale initiative headed by Chile, towards Australia and New Zealand, stands out: in this project, Arsat from Argentina and the Brazilian government have already confirmed their participation, and it is expected that other South American countries will be part of it too.
In turn, the trend of route diversification is linked to the particular imprint of Internet players in the industry. As can be seen in the classification of actors included in this edition of the map, they ceased to be entrants to become protagonists of the same weight as consortia or private and public cables. These actors were the ones who invested the most in the segment in recent years: only Google has 16 submarine cables worldwide, of which four are in Latin America (and Firmina between Las Toninas and the US east coast will be added in 2023).
The participation of content providers - in addition to Google are Facebook, Microsoft and Amazon - in global capacity is close to 70%, and the fact that they have different needs than those of telecommunications operators or consortia also leaves its mark in the business models and financing of the industry. In order to nurture international connections to the cloud and data centers, these hyperscalers offer fiber pairs as a bargaining chip to finance part of the landing of their cables. In other words, the excess capacity - that which is not used for own consumption - enters the game of buying and selling international wholesale bandwidth.
So far in 2021, three cables have started commercial operations - Mistral of Telxius and América Móvil, EllaLink of the eponymous company and Malbec of Globenet and Facebook - and another eight are planned for the next three years. These projects are part of the trend of route diversification, along with an annual doubling of capacity. Among the first impacts of this renovation, in Argentina there was a reduction in the cost of international capacity of between 30% and 40% in dollars. The South American country added two new submarine cables with landing in Las Toninas - the extension of Tannat (Antel and Google); and Malbec, a milestone for the market in more than two decades.
Both in Argentina and Brazil (which in addition to EllaLink is renovating the footprint in the Amazon), there is a reactivation in IP transit networks. There is a trend to move subsea capabilities further to the edge, in order to add traffic locally and distribute it with local expansions. Sparkle's project with Trans Ocean Networks in Panama for the installation of a digital hub is in line with this.