Latam: New options for IP traffic
Market Trend

Latam: New options for IP traffic

Latin America’s sustained growth makes it one of the most coveted regions to enter for European, Asian and North American carriers alike.

According to analyst firm BuddeComm, Latin America’s mobile penetration rate of 93% stands ahead of the global rate of approximately 73%, and the region’s growth is showing no signs of slowing down anytime soon.

Developing infrastructure to meet growing demand, however, remains a challenge for both new and established players and in particular, the development of the region’s IP backbone infrastructure poses a distinctly unique challenge. According to Luciano Salata, VP of business development at IFX Networks, there has been a noticeable change in how players in the region approach IP.

“Two years ago, there were few CDNs based in the region and very limited cable system capacity coming in from the US. Now, we are seeing different players entering the markets and developing intra-country connectivity. They are exploring new ways of fulfilling IP requirements,” he adds.

Regional carriers such as Internexa and GlobeNet have been vital in deploying extensive terrestrial routes across the vast continent, offering valuable resiliency in the face of limited subsea cable connectivity. Internexa claims to have one of the largest terrestrial networks in Latin America, stretching through Colombia, Venezuela, Ecuador, Peru and Chile and with plans to go on further still to Argentina and Brazil. GlobeNet meanwhile has connections from Colombia through Venezuela and onto the US.

In spite of the recent roll-out of these terrestrial networks, many countries in Latin America still suffer from limited access to major subsea or terrestrial cable systems. As a carrier neutral network service provider, IFX specialises in providing connectivity to carriers, ISPs and SMEs across Latin America. A substantial chunk of its business derives from enterprise customers looking to utilise MPLS/VPN services for video or IP telephony. Through this experience, Salata identifies Colombia as the only country in the region with multiple connectivity options.

“There are four to five different cables connecting Colombia, while countries like Argentina still only have two major options,” he says. “Interconnecting countries within Latin America is helping to add new options for carriers, and it’s also helping to avoid IP traffic going straight to the US.”

With few confirmed plans for further subsea cable links into and out of the region in the coming years, Latin America looks set to continue to instead rely on the development of intra-country connectivity.

“In summary, having two major subsea cable systems for the whole region is never going to be enough, so if new options came along I am sure they would be beneficial for the market and ultimately end users,” says Salata.

Brazil takes to the world stage

As if the Brazilian market didn’t seem lucrative enough at the moment, the country is also set to host the 2014 World Cup and 2016 Olympics. Both tournaments are predicted to drive content and content delivery greatly over the next five years as operators prepare for the events to be broadcasted worldwide.

Live streaming of the events will in particular help drive new bandwidth requirements, with the Brazilian government having already put in place a National Broadband Programme aimed at increasing digital presence and creating more affordable broadband services.

Every operator in the country is feeling the pressure to speed up deployment ahead of the games, and in particular wireless operators are being forced to invest in backhaul over the next few years to accommodate the increasing use of data services. For 2012 and beyond, all eyes will be fixed firmly on Brazil.

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