United States , Brazil , Uruguay and Argentina

GlobeNet downplays competition on Atlantic cable routes

Bnamericas Published: Friday, June 11, 2021
GlobeNet downplays competition on Atlantic cable routes

Telecom infra firm GlobeNet, controlled by Brazilian investment bank BTG Pactual, is not particularly concerned about the growing number of submarine cable systems in the Atlantic Ocean off South America.

The company on Thursday officially unveiled its Malbec cable, a 2,600km system connecting Las Toninas in Argentina to Santos and Rio de Janeiro in Brazil, with in-land extensions to Buenos Aires and São Paulo.

"We know that the region in general and Argentina in particular demand large volumes of capacity and route diversity. New cables help develop the region and increase demand," GlobeNet's CEO Eduardo Falzoni told BNamericas.

"But Malbec, with its low latency and redundancy of backhauls and protection, is the best option to connect Argentina with Brazil and the United States, mainly due to its integration into the GlobeNet network."

By linking to GlobeNet's network of 26,000km of cables, Malbec’s goal is to enhance data traffic between South and North America.

According to GlobeNet, Malbec can provide 400Gbps for individual transport services between Argentina and the rest of the continent. The initial total available capacity of the system is 108Tbps. 

The region is thriving with high-capacity cable projects, some of which tend to compete as they target the same types of clients.

Seaborn’s Seabras-1, for example, activated in 2017, claims to be the only direct POP (point-of-presence) to POP system between São Paulo and New York City and the one with the lowest latency route between the B3 stock exchange in the Brazilian city and the trading exchanges of New Jersey. 

The Monet cable, opened in 2018 and owned by a consortium formed by Google, Brazil’s Algar Telecom, Uruguay’s state carrier Antel and Angola Cables, hooks up Boca Raton in Florida with Brazil's Fortaleza and Santos, and through the connection to sister system Tannat, also to Uruguay and Argentina.

Additionally, Google announced this week it will build a new proprietary system in Latin America, called Firmina, also connecting the US East Coast and Argentina, with landing points in Brazil and Uruguay.

Falzoni downplays the potential competition and is optimistic about demand for Malbec. 

According to the CEO, the cable already reports active Brazil and Argentina clients for the Malbec routes (Rio de Janeiro-Sao Paulo, São Paulo-Buenos Aires and Rio de Janeiro-Buenos Aires), as well as Colombian and US customers leveraging Malbec's integration with GlobeNet’s system. 

Clients are internet service providers (ISPs), carriers and over-the-top (OTT) players.

Falzoni did not disclose how much GlobeNet invested in the Malbec project, saying capex was "in line with the standard values for a cable of this size." The CEO also said “additional investments” were made in landing stations and redundant backhauls.

The system is ready to support a future landing in Porto Alegre, in southern Brazil, but Falzoni did not commit to a date for the extension.

“We have expansion plans in the region, both in our connectivity infrastructure and in our edge datacenter, which we will announce in due course. The installed branch gives us the possibility to connect POA [Porto Alegre] and integrate it into our network seamlessly,” Falzoni said.

Questioned about the status of these projects given GlobeNet’s potential merger with Brazil’s Oi, as part of an offer by BTG Pactual to buy control of Oi’s fiber unit InfraCo, the executive said InfraCo’s competitive bidding process is unfolding and that he could not comment further.

BTG Pactual gained a preferential status in InfraCo's auction, which is slated to take place on July 7.

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