Angola Cables restructures Brazil ops, expands datacenter business

Telecoms wholesale, datacenter and interconnectivity provider Angola Cables is expanding its infrastructure in Brazil and diversifying its business portfolio as data storage and processing demands and traffic soar.

As part of this greater focus in South America, Brazil in particular, the company rebranded its regional operations to TelCables Brasil, tapping Claudio Florindo as country manager, with plans to also focus on cloud, security and digital solutions.

The company operates, directly or in consortium, two submarine cables connecting South America: Monet, linking Brazil with the US, and the South Atlantic Cable System (SACS), connecting Brazil and Africa. 

The company also has a fiber ring connecting São Paulo with Buenos Aires and Santiago and datacenters in Brazil, the US, Europe and Africa.

In this interview, Claudio Florindo and Angola Cables CEO Angelo Gama (pictured) talk about this new momentum, the investments in datacenter expansions, the launch of new points-of-presence (PoP), and more.

BNamericas: Why did the company decide to rebrand and create a separate structure for Angola Cables Brasil?

Gama: We are always thinking about how we can improve our operation and be closer to customers and suppliers. We are currently present on four continents, either with our own structure or in partnerships. From Singapore to Los Angeles, around the Atlantic and the Pacific, all over the world. And with around 30 points-of-presence (PoP) on the planet.

But given our focus on Brazil, we understood that it would be important to have a more local structure, with an operation that does not necessarily report to Angola Cables; a global positioning, but with a more local performance and having proximity to the local market and being free from decision-making intermediaries.

BNamericas: Is this also aimed at reinforcing operations in Latin America beyond Brazil?

Gama: In a way, yes. With this new operation, we will have people in the field to be more attentive to business opportunities.

The new TelCables Brasil will be attentive to all these opportunities that the regional market, Brazil in particular, has to offer. This would hardly be detected from Angola.

Florindo: We want TelCables to look beyond traditional connectivity, which is something it already does and will not stop doing. But we are betting heavily on new services and solutions. 

We will continue to develop and modernize our customers, the structure for our customers [base], but we understood, from requests by these customers, that it was necessary to go further. And that is why we are betting more on cloud services, storage, backup, disaster recovery, SD-WAN and cybersecurity. We want to have an end-to-end approach to the corporate market.

We will continue to invest in the segment of ISPs, carriers, OTTs, CDNs, hyperscalers. We will not stop doing this. 

But we want to be aggressive and be closer to the corporate sector, including with the verticalization of business, entering new segments. We’re not forgetting, of course, the public sector. We have presence in new structures and datacenters to serve this sector...

BNamericas: … with a point-of-presence in Elea Digital's datacenter in Brasília …

Florindo: ...exactly. Mainly to serve the public sector in the capital.

But there are digitization initiatives in Brazilian states that are interesting opportunities as well. Like the Piauí Digital project, in Piauí. We feel that we can contribute to projects like these, for example in Ceará, where we have a local structure.

Our goal is to be closer to the public sector.

BNamericas: Is the partnership with Elea Digital limited to Brasília? Because the company has projects in other states, such as Porto Alegre and Fortaleza, where Angola Cables is also present with AngoNap.

Florindo: For now, yes. But nothing prevents us from strengthening these ties. In this ecosystem, sometimes we are partners, sometimes customers, sometimes suppliers. If it makes sense for our strategy of entering a new region...

But the choice for Brasília was due to Elea's connectivity aspects, the arrival of new fiber pairs, the quality of the assets. 

BNamericas: And what is TelCables' network expansion strategy in Brazil, in terms of new regions?

Gama: We are increasing the capillarity of our network to other spots. We are starting now in Brasília, then we have Cuiabá mapped. Goiânia too, Campo Grande. We are looking at Manaus as well.

BNamericas: With points-of-presence?

Gama: PoPs, yes. 

In terms of geostrategy for Brazil, if we look at a good part of the Brazilian economy, the GDP, this is mostly on the coast. 

We have a big hub, Fortaleza, which is already the second main point of national interconnectivity. Rio de Janeiro fell to third due to its proximity to São Paulo. As such, Rio is being used at this moment as a backup region for São Paulo. It is as if both cities formed a single large zone, São Paulo-Rio.

It will be necessary – and this is an investment that is not just ours, it also comes from other companies – to decentralize data and connectivity. Big companies are investing a lot in new regions like Porto Alegre.

All in all, I think we are going to have in Brazil three major connectivity hubs. 

At the moment, one is being formed in Brazil from Porto Alegre. Then we have this great São Paulo hub, which almost swallows Rio de Janeiro due to its proximity. And Fortaleza, further north, which is where we are already.

From those three more on the coast, up to the interior, it will depend a lot on how the local economies are going to develop and what the state governments are going to offer in terms of attracting investments.

BNamericas: How is this process? What comes first?

Gama: In most cases, the datacenter comes first, followed by an undersea cable or fiber backbone. Then, depending on who are the tenants of these datacenters, a regional ecosystem is created that leverages the entire digital economy of that location.

Take Porto Alegre. We already know that large international operators are going to set foot there. We are talking about OTTs, companies like Microsoft, AWS, Google. We already have a cable that passes through Porto Alegre. But certainly more submarine cables will be diverted to stop [there]. And so the ecosystem grows.

Then it's a question of having a very strong partnership with institutions and public bodies that promote the digital economy in that region. This is what happened in Ceará, in Fortaleza. There was this symbiosis between the private sector and the local government.

I mean, private always goes first. At this moment there will be many more announcements for datacenters in Porto Alegre, for local structures. 

Companies are setting up shop in Porto Alegre and have plans this year, next year, to make the city a hub of their operations, with availability zones, datacenters. Almost all, if not all, OTTs are our customers.  

BNamericas: And in terms of investments by Angola Cables/TelCables Brasil?

Gama: We are investing in our datacenter in Fortaleza.

The new datacenter will be at least four times bigger than the one we have in the city, in a gradual ramp-up phase. It'll be a new, adjacent building, which should be ready by the end of next year, designed for 16MW in capacity and 1,000 racks. 

It starts with 2MW of capacity.

And we are going to increase the capillarity of our network, while also evaluating opportunities in new segments. With submarine cables, we are also evaluating other business opportunities in Brazil.

BNamericas: Do you evaluate proprietary cables, like SACS, or in consortium with other companies, like Monet?

Gama: In consortium. Technology evolves in such a way, and it's so fast that with a single fiber optics cable, with a fiber pair, I manage to carry all the data traffic from the US to Argentina. 

In consortiums, the management, the governance is more complex, as it involves different stakeholders. But it is more viable operationally and economically. 

We will no longer invest in cables of our own, as sole proprietors.

BNamericas: And are you considering any new projects?

Gama: We are evaluating the evolution of the market. I think we are entering the era of consolidation. When the new cables are ready, the market will have to consolidate. 

It is now consolidating in the ISP segment in Brazil and in the region. We will soon have 15 to 20 large ISPs, the small ones will be bought. The same will happen with submarine cables.

Large OTTs, with their own cables, leave little room for other submarine cables. We are going to have to be much more cautious with investments than in the past.

BNamericas: What is the expected capex for operations this year?

Gama: The new datacenter in Fortaleza will cost US$40mn.

Florindo: And we're going to add six more PoPs in the next six months, including Brasília. It's not a huge expense, though. By Q3, Q4, we should get to 22 active PoPs in Brazil.