Convergencia Research, Análisis y consultoría
Thursday, September 15, 2022

Carriers Map in Latin America 2022

Latin America begins to shape the wholesale digital infrastructure for the next 15 years

Carriers Map in Latin America 2022 - Credit: © 2022 Convergencialatina
Carriers Map in Latin America 2022 - Credit: © 2022 Convergencialatina

The submarine wholesale industry warns and recognizes a need for renewal: either through new cables; forms of association and contracting of pairs of fiber or spectrum in existing cables; or plans led by governments, motivated by geopolitical issues rather than business plans.

The central reason behind this need for renewal is that the subsea cables of consortiums deployed at the beginning of this century are approaching their end of life, between 20 and 25 years. While some players seek agreements with new existing cables -such as Sparkle, with Curie and Monet-, players like Cirion evaluate the situation of their 30,000 miles of lines. Others perform upgrades. For example, ARCOS cable, which surrounds the Caribbean in its Eastern and Western sections, was built in 2001 with a capacity of 960 Gbps. According to inquiries made by Cable & Wireless Networks with vendors, its end of life could be extended by another ten years: currently its capacity is 32 Tbps, thanks to upgrades carried out electronically.

In the Caribbean there are certain renovation needs typical of that region, so it is expected to be a "hotspot" in the next two to three years. Digicel plans the Deep Blue One, in association with Orange, to support its own provision of services, since it is an area with less presence of hyperscale players. Also, to supply the demand of the Oil & Gas sector; and guarantee resilience, given the proximity of the end of life for Americas II, around 2025. The Deep Blue One is scheduled to come into operation at the beginning of 2025, and will also be interconnected with Orange's Kanawa cable and Digicel's SCF.

Another new cable announced during 2022 is Carnival Submarine Network-1 (CSN-1), by of Telconet de Ecuador. It will have 4,500 km of extension between Ecuador, Panama, Colombia and United States and will seek to provide a connectivity alternative to Central America, due to the age of consortium cables; in addition to enabling the first access to data centers on the west coast of Florida.

Among the projects with geopolitical incidences, the Humboldt project, which will link Valparaíso with Sydney, is being pushed by the Chilean State. The laying of 14,810 km will require an investment of US$ 394 million and US$ 18 million in annual expenses. It aims to capture 18% of traffic between South America and Asia-Pacific, and according to Chilean regulator Subtel, traffic between the two regions could grow at an annual rate of 28% over the next 25 years. It is expected that the shareholders of Humboldt Cable System (HCS) will be defined in 2022: among them would be the South American countries with which progress was made in talks -Argentina and Brazil-, as the dialogue with Paraguay and Bolivia continues.

Meanwhile, the diversification of land routes and the strengthening of the backbone infrastructure seeks to accompany an environment of smaller data centers, more geographically distributed to get closer to the user and with new capacity requirements. The large Cloud providers are focused on the creation of specific Clouds to serve verticals in the economy, and the multiplication of regions to approach companies of all sizes.

Added to this situation are two new positions of central players in the Latin American wholesale segment: Cirion as a new independent company, after Lumen closed the sale of its business in Latin America to Stonepeak; and Globenet, after the integration with V.tal of Brazil.

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