LatAm needs 31 new submarine cables in the next 10 years – CAF

In the next 10 years, 31 submarine cables will have to be built in Latin America, according to calculations by Latin American development bank CAF.

“Latin America has the opportunity to review its investment schemes,” CAF’s digital infrastructure chief, Eduardo Chomali, told a seminar. Yet, submarine cables apparently aren’t being planned at the rate they should be, he added.

Chomali said Latin America is connected by 68 submarine cables, increasing the region's capacity fivefold in the last 20 years. However, 23 of these are over 15 years old and 18 are over 20, approaching the end of their 25-year useful life.

Although the current cables can still increase capacity, more should be built.

Chomali said about 40% of regional traffic is international and 90% of this traffic goes to the US. Latin America has also direct connections with Angola, Cape Verde, and Cameroon, and Spain and Portugal.

Low inter-regional connectivity remains a problem, as “traffic between Latin America is still much lower than what we see within Europe and Asia,” Chomali said.

Intra-regional traffic exceeds 50% in Europe and Asia, but reaches 20% in Latin America.

In addition, there is little interconnection at the local level. According to a CAF study focused on an internet exchange point in Panama, the IXP will generate cumulative savings of up to US$261mn by 2025, in addition to latency reduction of 40%-85% in all sections.

Internet exchange points also increase penetration, improve quality, and foster the development of regional and local content.

Chomali recognized regional growth and highlighted the expansion of terrestrial interconnections. "There are important efforts in the Southern Cone, mainly Bolivia and Paraguay, seeking agreements with bordering countries for their integration," he said.

He added that in the last 15-18 years, internet services have grown strongly in Latin America and about 70% of people in the region have access to the internet via mobile and fixed technologies.

However, investment amounts and capacity were still too low, while especially digital infrastructure provides vast opportunities.