Colombia will be ‘next big anchor point’ for Latam

11 July 2017 | James Pearce

GlobeNet expects Colombia to follow Brazil as next focus for investment in Latin America, Rodolfo Lopez Stanic tells James Pearce

Rodolfo Lopez 680x480

GlobeNet has identified Colombia as what it thinks will become the second anchor point for the Latin American wholesale market after Brazil.

Traffic in Latin America is growing significantly, but for most subsea cable systems, Brazil is the key location. Seabras-1, SACS, BRUSA, and Monet are all among recent cables either in development or already launched that land in Brazil.

As demand for connectivity in the region grows, there is a need to establish a second hub, and GlobeNet chief commercial officer Rodolfo Lopez Stanic claims that will be in Colombia.

"Clearly Brazil is the hub site for the Latin American region and we’ve seen a lot of carriers approaching it this way, including new players like over-the-top (OTT) companies," he explains. "Big companies like Netflix or Akamai see Brazil as a good place to store their content, the first anchor into the Latam market. From there, they can jump into other countries, and this is a huge trend we are seeing.

"Brazil will continue to be the star in the market for a couple of years more, but we see new countries being added to this. We see Colombia as the most likely country to become a second anchor.

Stability

Colombia already has high connectivity, but it is the relative stability of the country that makes it an appealing destination for carriers. 

Latin America’s third biggest economy, this stability has seen Colombia’s middle class on the rise, climbing from 16% of the population in 2002 to 27% in 2011. Growth in 2014 was 4.8% – higher than any other country in the region. A country once living in the shadow of Pablo Escobar has found new confidence, according to analysis in the UK’s Daily Telegraph.

"The economic situation [in Colombia] has been pretty steady recently, although I think it is competing with Argentina because it is a similar sized market," adds Lopez when he spoke to Capacity about GlobeNet’s plans there. 

"Argentina has seen some turmoil over the last few years but is now seeing some stability, which will see a lot of big players also cast their gaze on Argentina. But the second country in our view will be Colombia."

Colombia is a natural fit for telecoms carriers as it has long been seen as a gateway into the Americas. For GlobeNet, that has led it to launch a new data centre in Barranquilla.

This data centre is a new type of venture for GlobeNet, he explains. It will not just contain traditional carrier traffic, but also offer a host of new services.

"We set out a plan last year to build a data centre in Colombia. We expect the build to be finished in August and everything is on track. The fact is that we are pretty amazed at the demand that we have seen in Colombia for this kind of services. 

"It will not just be used for interconnection – this is a full data centre, far beyond the traditional data centres we have developed," he said. 

"This will include a wide range of services. What we have developed is a basic data centre but also we have followed the value-add chain around hosting and equipment."

Go West

The facility in Barranquilla will be a 200 square metre upgradeable Tier III data centre offering major integrators the opportunity to offer their sensitive customers a secure and resilient environment diverse from those currently on offer.

It will be adjacent to the company's existing subsea cable landing station, and will support GlobeNet's full suite of Infratructure as a Serice (IaaS) products.

The key reason for this data centre though? Colombia is a gateway to the Americas, but not just the Eastern, Atlantic countries – it can also act as a path to the western part of the Latin American market.

In Capacity’s April/May 2017 issue, operators highlighted the slower development of subsea cable  systems in the Pacific, with the main reason given being due to smaller populations. For Lopez, this will not always be the case.

"The Atlantic has been the main focus for carriers in the Latam region, but as that focus moves on to the Pacific, Colombia will play a major role in that development. 

"Some years ago, countries like Ecuador and Peru were not so developed from a technology perspective, but after significant economic development, they are becoming more attractive markets for carriers and OTTs," he says. 

"Chile is a slight exception – it has enjoyed a stable economy for a number of years, but most of those links are served by routes running from Argentina to Chile."

With the common pattern in most regions seeing a growth in data demand as economies and political situations stabilise, GlobeNet will hope it is perfectly position in that part of Latam.

Topics: Globenet, Capacity media, wholesale telecoms, Colombia