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Cable investors eye Latin America for new builds

29 Aug 2012

Latin America is a burgeoning bandwidth market. Data from TeleGeography’s Global Bandwidth Research Service reveal that international bandwidth usage grew nearly 9-fold between 2007 and 2011, from 659 Gbps to 5.6 Tbps. To meet this growing demand, submarine cable operators are adding capacity at a rapid pace. While most supply increases thus far have resulted from upgrades to existing systems, a variety of companies are plotting a new wave of submarine cable investments in the region.

America Movil is expected to bring its America Movil-1 (AM-1) cable into service in 2013, linking Brazil, Colombia, Venezuela, and several other Latin American countries to the U.S. Meanwhile, Brazilian operator GlobeNet is building a second cable from South Florida to Colombia. Besides these two cables, which are currently under construction, many potential cables are in the planning stages. The following aim to be in service by 2014:

- Seaborn Networks is planning a direct New York-Sao Paulo cable called Seabras-1.

- South African investment group eFive plans to build the South Atlantic Express (SAEx) cable linking South Africa to Brazil.

- WASACE Cable Company is developing a series of three systems, two of which would connect to Latin America; WASACE Americas would be a U.S.-Latin America system, while WASACE Africa would be a Latin America-Africa cable.

- Brazilian government-owned operator Telebras has proposed a series of cables that would link Brazil to Africa, Europe, the U.S., and other Latin American countries.

- A pair of South African investment groups have proposed a cable named after the BRICS (Brazil, Russia, India, China and South Africa) economies that would span from Vladivostok in eastern Russia to Fortaleza, Brazil with landings in China, India, Mauritius, South Africa, and Singapore.

“Given Latin America’s rapid bandwidth demand growth and relatively high capacity prices, the region seems well suited to new cable investments,” said TeleGeography analyst Jon Hjembo. “While multiple new cables may appear excessive, historical experience suggests that only a few of the proposed systems will ever be built.”

To learn more about trends in Latin American connectivity, peering, traffic, and pricing, view the “Spotlight on Latin America” webinar on TeleGeography’s free Insider site.

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