The perfectly timed expansion
24 May 2018 | Natalie Bannerman
As GlobeNet expands its subsea cable network into Argentina for the first time, Erick W Contag, GlobeNet’s executive chairman, talks to Capacity about the significance of the expansion and what’s next for the company.
Timing is everything. Aside from the number of unique opportunities created by expanding its subsea cable network into Argentina, favourable regulatory and governmental conditions are among some of the reasons why GlobeNet chose to add to its global footprint at this time.
The time is right
“The conditions for it were right at this time,” says Erick W Contag, executive chairman of GlobeNet. “The economy in Argentina is growing, there’s a strong framework in place and there is important investment being made in the country.”
But he says the existing subsea footprint was “always going to have a third leg”. “Our existing 23,500 km subsea network already connects the USA with Bermuda, Brazil, Colombia and Venezuela. So, it made sense to add Argentina into our network, furthering the work of digitally connecting all of Latin America.”
It goes without saying that global data consumption is growing at an ever-increasing rate meaning that demand for greater capacity was also driving the need for improved connectivity. According to the GlobeNet’s figures, in 2016, roughly 79% of the residents of Argentina accessed the Internet with predictions being made that by the year 2019 this figure will reach 95%.
As a result of these numbers Contag says: “demand for high-bandwidth, data-intensive services including cloud computing and video streaming is outstripping the bandwidth capacity of existing [subsea] systems.”
Colombia is the next big thing
Only last year GlobeNet’s own CCO, Rodolfo Lopez-Stanic described Colombia as the ‘next big anchor point’ in Latin America. In Lopez-Stanic’s interview he said that Colombia is to follow Brazil as next hub for wholesale investment in the region.
Speaking with Contag, it’s clear that not only does he feel the same way as Lopez-Stanic, but that he sees Argentina in a similar light.
“Argentina is where the Colombian market was back in say 2010,” replies Contag. “Looking at the region Brazil is naturally the central hub because of its scale and density of people. Colombia follows Brazil because of its growing economy and the ideal conditions created by the government to undertake projects like this one. We have to remember the Colombia actively sought out foreign investment in the telecommunications space, which made it the next logical choice and we see a similar thing happening in Argentina at the moment, which makes this the perfect next step for us.”
OTTs improve connectivity
On the topic of OTTs entering the subsea cable space, Contag sees their influence as only a positive because of their need to bring the internet to as many locations as possible. Ones that otherwise wouldn’t have connectivity.
“Without OTTs a lot of the infrastructure we have wouldn’t exist because they are willing to deploy the infrastructure that perhaps would’ve been very difficult to justify for a carrier,” he explains. “Because of the internet you have to democratise information and content – many of the remote regions that these OTTs are trying to reach because of that growing need for internet connectivity, I doubt would have had it without it, and I’m all for it.”
As a company Contag says that GlobeNet “works and partners very closely with all the major OTTs” adding that “GlobeNet has always focused in developing and maintaining lasting relationships with customers and partners”. According to him in the company’s 15 years of operation it has yet to lose a key customer, a testament “to the management of the company, the quality of our people, and the fact that we sit down and listen to what our partners and customers really need and that helps us tailor our network and the services we have built,” says Contag.
Data centre versus landing station
GlobeNet recently announced the opening of its new data centre facility in Barranquilla, Colombia. The 200 sq m ICREA Level IV and Green Seal for Sustainability certified facility is adjacent to the GlobeNet cable station in Barranquilla and highlights the growing number of submarine cable projects that forgo the cable landing station for direct connection to the data centre. But Contag says that there is need for both types of connectivity depending on the traffic.
“This is why you need to understand traffic flows, explains Contag. “To be more efficient, mainly the large OTTs have designed their cables to optimise the routes between data centres. Because they need multiple routes, if there is a cable cut, they have 3 - 4 routes; so I do think – in the aforementioned case – that it makes sense to connect a subsea network directly into a data centre.
“But not all the traffic is data centre to data centre traffic,” elaborates Contag. “You have to think every carefully about who are going to be the up takers of that traffic today and 5-10 years down the line.”
Speaking in reference to the aforementioned Argentina cable expansion, he adds: “We mention that we land in Praia Grande and extend into Sao Paulo, and we land in Las Toninas and extend to Buenos Aires; and our system is architected taking into consideration data centre (dc) to data centre type of connectivity. But we also need to have the capability to drop of capacity for the non dc-to-dc traffic.”
Despite the slew of recent announcements Contag says that there’s plenty more for GlobeNet in the near future. Without giving away too much he hints at further projects in the infrastructure space.
“We have a solid strategic plan that we’re following, hence the types of announcements you’re seeing. So we’re talking about things like subsea and terrestrial expansions, network end-points, including points of presence. And our data centre in Barranquilla should give you an idea of the path we are taking.”
In particular Contag says that the company is repurposing its cable landing station in Fortaleza into a wide-scale colocation facility in order satisfy the demand of the market, as well as mentioning the launch of the “second largest internet exchange point in Brazil after Sao Paulo” over the coming months.
Whatever move GlobeNet plans to make next, Contag summarises it perfectly in saying: “we have grown and we will continue to grow more or less along the same lines. In order for us as a company to deliver the kind of services we are known for we have to stay ahead of what’s happening in the market, and we have to continue to update our infrastructure.”
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