Big Interview

Meeting demand in Mexico

Neutral's Link network.
Neutral's Link network.

Neutral Networks went live with its new fibre ring in late 2021 and phase two is planned to begin in the second half 2022. Product manager Salvador Vaquero tells Melanie Mingas about the business case driving demand

Digitalisation, domestic 5G deployments and its gateway status as an entry point to the Latin American market are driving the need for more data centres across Mexico, but the demand is exposing a shortfall in fibre capacity and reach. In fact, according to Salvador Vaquero, product manager at Neutral Networks, there is not enough infrastructure of any type to meet present demand.

“This is a very vast topic, especially in Mexico where we lack telecom infrastructure, particularly in rural areas. Mexico has a huge territory and to connect main cities more long-distance infrastructure is needed, especially to connect the centre of the country with the south-east and north-east,” says Vaquero.

Salvador Vaquero.PNG
Salvador Vaquero, Neutral Networks.

“Digitalisation means not only residential internet access but also 5G, which leads us to question whether we have enough metropolitan fibre to deploy this new mobile service. The answer is no, there is not enough fibre, not only in small and medium-size cities but also in main cities,” he continues.

Throwing its hat in the ring – puns intended – last year, Neutral Networks completed a 12-month build on a new fibre ring in Querétaro, near Mexico City, as part of its Link hub network. A new, 40-mile ring was announced in March.

Link is the first fully neutral high-capacity network that connects the main data centres and Points of Presence (PoPs) in the area with redundancy. It is a three-phase project with phase two planned for the second half of this year. That phase will create a ring from KIO, a carrier-neutral data centre, to downtown Querétaro that will then connect to other data centres as well as several long-distance carriers.

Local regulations specify such deployments must be buried at least one metre underground and shielded, adding to project costs, but ultimately ensuring all data centres have secure infrastructure to connect to other cities within Mexico and the US.

“It’s been of great interest to the market in general, from national and international operators as well as data centre developers,” Vaquero says of the project.

“What they are looking for is high-capacity transmission infrastructure, meaning dark fibre, high-capacity ethernet, and internet services,” he adds.

They are also looking for dark fibre as a service. In the past, Vaquero says, nobody wanted to lease dark fibre in metros but then came a wave of divest-and-leaseback deals as well as players spinning assets and services into their own independent opcos.

“This opens a great opportunity in dark fibre leasing. Not everyone is willing to have dark fibre as an asset, but as a service instead,” Vaquero explains. “This is how Neutral Networks has become a pioneer in leasing dark fibre which, by the way, honours our neutral characteristic, creating so much interest in dark fibre in our new ring. Many eyes are looking at our lease model, which will soon enable exponential growth for all players in this new data centre hub.”

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Neutral's Next route

Follow the money

Link is not Neutral’s only active project. The big one is the Next fibre network, a neutral, cross-border telecom solution of long-distance dark fibre – and yes, it’s available for lease, too. Offering connectivity to Neutral’s other networks, it is a doorway to the high-capacity backbone of the US. It begins at a PoP in Laredo, Texas, and takes a different route to other lines by running through a state highway to cross the border with Mexico and reach into Monterrey, Nuevo León. But the focus on Next does not mean that work closer to home will stop.

“There’s a lack of diverse, new and robust long-distance infrastructure and several national and international operators are desperately looking for diverse high-quality transmission infrastructure for high-capacity data communication,” Vaquero says.

Demonstrating his point, he says the Querétaro data centre hub in the Link network requires onward connectivity to major cities like Monterrey, Guadalajara and Mexico City and this is where investors should focus. “Because in a few years, demand will increase exponentially, and we certainly need to be ready for such a challenge,” he says.

As positive it is that Neutral Networks has so much fibre in the pipeline, the current situation is not addressed until fibre is in the ground because, as the adage goes, it takes many hands to make light work.

“Neutral Networks’ long distance route from Monterrey to Laredo, and planned routes to connect Monterrey with Querétaro and Querétaro with Mexico City, will not be enough, more investment is needed to reach other regions of the country,” says Vaquero.