New cables have long term business case, says Capacity Latam panel
The keynote panel at Capacity Latam 2015 this morning were “bullish” that the growth of demand in Latin America will be sufficient to keep up with the falling price of capacity.
The Latin American market is preparing for a number of new subsea cable projects to go live over the next few years, including the likes of PCCS, Seaborn Networks’ Seabras-1 and Angola Cable’s SACS.
The additional levels of capacity as well as greater route diversity is set to significantly bring down Latin America’s traditionally high pricing.
However, new entrants in the market believe there is a strong long-term business case for new subsea cable projects. Seaborn Networks CEO Larry Scwartz, who is spearheading a route between Sao Paulo and New Yorkdue to go live at the end of 2016, said that in the long term he believes the compound annual growth rate with be higher than price erosion.
In the short term, he also believes any decline in pricing will be mitigated by early sales on the new cable, which has secured anchor customers such as Tata Communications and Microsoft.
Artur Mendes, CCO at Angola Cables, added that international traffic will increase as a result of greater route diversity. Angola Cables, for instance,is aiming to establish the first ever South Atlantic route linking Africa to Latin America, and Mendes is confident this will bring Latin America additional traffic from the Middle East and Africa.
“Governments want more accessible prices for the population. We want to be a part of that and help develop society by offering better prices and availability,” he said. “We do need to make sure at the same time, these cables are profitable.”