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Continued Growth Opportunities Throughout Latin America

June 28, 2023

Written By: Kevin Imboden

As rapid growth continues across primary and smaller markets in North America, Europe, and Asia, one region shines through – Latin America. This expansive market has surging potential as a robust data center region and is emerging on the industry’s roadmap. Although several countries throughout LATAM have long coped with geographic impediments to critical IT infrastructure (mountain ranges, thick rainforests, coastal flooding from waterways, and more), new and planned undersea cables and associated backhaul fiber have now opened the region to more significant investment and digital distribution. 

Inclusive of Central America, the Caribbean, and South America, the region is home to over 650 million people, led by Brazil, Mexico, and a more distant Colombia. The regional income per capita doubled in the decade of rapid growth from 2000 to 2010. However, it has fluctuated since due to political changes in countries such as Venezuela or Nicaragua and occasional recessions in larger markets. Three-quarters of the population now have access to smartphones, albeit mainly at a fourth-generation standard that will continue for some time due to the slow pace of fifth-generation rollouts. Smartphone usage will continue bridging the gap between urban and rural connectivity, as less than half of the regional population has access to fixed broadband. As incomes continue to grow, the opportunity remains intriguing; 170 million people have yet to regularly get online, with 325 million likely to use a more significant number of services once fiber reaches their homes.  

To power prospective data infrastructure, Latin America has nearly 300 gigawatts of renewable power, double the total of a decade ago. Hydropower makes up half of this total, thanks to sizable investment in Brazil in past decades and three potential large projects under review. Offshore wind also contributes to countries with long coastlines, including Argentina, Chile, Brazil, and even Uruguay. While fossil fuel firms are occasionally directly supported by local governments, countries such as Chile are experimenting extensively with alternative fuel sources, such as hydrogen, for future power.  

The most extensive globally available cloud services have noted the regional potential, with edge or full regions launched or announced in Chile, Mexico, Argentina, Colombia, Brazil, and Peru. Many of these deployments have launched with small initial deployments, scaling rapidly as new clients, including government agencies and large enterprises, sign on and begin their expansions. To support this, certain cloud services have announced local skilling programs, working with educational authorities to train the next generation of data center technical staff, thus avoiding the lack of personnel prevalent in more mature markets.  

To transport this data globally, multiple new undersea cables are arriving across the region over the next three years, funded by a mix of content providers, communications companies, and investment groups. This includes three new systems landing at the key Mexican hub of Cancun, one landing near the Brazilian business capital of Sao Paulo, and others linking currently underserved points throughout the Caribbean and surrounding islands. Fiber network operators will continue to be crucial in the growth of the local user base, providing localized connectivity back to key landing points.  

Increased connectivity will provide continued growth opportunities for those throughout Latin America and, thanks to renewable power, may not cause environmental damage in a region with sensitive habitats. Expect sizable digital ecosystem expansion across the next decade, with initial markets growing toward maturity and the development of the regional edge forthcoming. 

Learn more about EdgeConneX data center in Santiago, Chile HERE.

Learn more about EdgeConneX data center in Buenos Aires, Argentina HERE.

To speak to someone about your next data center deployment, contact capacity@edgeconnex.com.