Carriers Map in Latin America 2024 - Credit: © 2024 Convergencialatina
The data processing requirements that the use of AI and Generative AI will entail, and the use of apps based on these technologies, are anticipated as the drivers of new traffic models in Latin America. Of the three key axes of the wholesale ecosystem, Data centers emerge as protagonists, with specific points in Latin America becoming areas of concentration of data centers, such as Querétaro, in Mexico; Santiago de Chile; Bogotá and San Pablo.
The Mexican city in particular is attracting investment projects: 15 Data Centers are currently operating in Querétaro and another 18 are planned, with announcements by Google and Microsoft to install their Cloud regions there, and submarine cable projects that seek to anticipate future business in the zone, such as Gold Data-1 + Liberty Networks-1.
Energy supply and capacity expansion are the main concerns of the Data Center segment, when it comes to facing the new demands for data processing by AI: an example of this is Oracle, which multiplied by 21 the number of GPUs available in Latin America, for the implementation of AI projects in its 7 Oracle Cloud regions. Regarding terrestrial networks, the links between Data Centers and the improvement of metro networks become key factors in the distribution of connectivity. Just to name one case, Cirion increased 570 km of Metro networks and 1,800 km of Long-Haul networks during 2023. Currently the company has more than 160 linked data centers throughout Latin America.
For submarine cables, the advance of AI and the concentration of Data Centers open new paradigms of traffic models and future projects show three motivations: traffic driven decisions (that is, traffic above replacement due to age); particular needs of the markets; and the need to address areas of concentration of data centers.
The EllaLink, which connects Brazil with Portugal, will have an extension of 2,000 kilometers towards French Guiana, and would generate a latency of 80 milliseconds between Guyana and Europe. This project arises from an agreement with the public company of the South American country “Splang”, and has local financing and the European Commission. Added to Guyana's particular need for a direct route to Europe is the location of the European Space Center in that country. For the entire Caribbean arc, this project implies a paradigm shift in the traffic model, without passing through the United States.
An EllaLink Branch to Belem, in the State of Pará in Brazil, is also being analyzed due to the connectivity needs of the Amazon region. Belem is the northern point of lines in the area, brought together in the Connected North Program, and is one of the three international exits that the Brazilian government is considering: there is also the extension of Infovía 2 to Leticia in Colombia (already confirmed by authorities of both countries) and a third alternative is towards the Pacific Ocean, through Peruvian soil.
The Humboldt cable, between Chile and Oceania, will support one of the Data Center sinks in Latin America, such as Santiago, Chile. The Chilean State will develop it together with Google: construction will start in 2025 and entry into operations is expected by the end of 2026, with an initial investment of US$55 million.
Meanwhile, owners of existing submarine systems are reaching agreements on their infrastructure. Sparkle obtained the right to use the Monet cable, based on an agreement with Algar Telecom; Angola Cables and EllaLink reached a capacity sharing agreement; and Telxius joined Google's Firmina.