Latin America could be telecom's golden goose

Jessica Scarpati
08 Oct 2010
00:00
 
"Running a global network [means] we're not just looking at the US - we look at Asia, Europe and at connecting those three continents together, and the amount of undersea cable capacity [that exists today] is actually quite a lot," Wheeler said.
 
"One of the challenges that Latin America has as a whole is [that] there are not that many [undersea cable] systems that go down there, and a lot of the systems [only run up and down] the Atlantic seaboard."
 
Compared to the large amount of undersea cable between California and Japan or New York and the UK, the submarine cable system landing in South America -- particularly below the equator -- appears paltry. Central America and the Caribbean fare better, benefitting from their proximity to North America and the ample number of landing points on the various islands.
 
Around the world, undersea cable is owned either by individual operators, third-party lessors or consortiums. Latin America's biggest undersea cable systems are run by a few sole owners -- Global Crossing, Telefónica, undersea cable wholesalers GlobeNet (a subsidiary of Brazilian mobile operator Oi), and Latin American Nautilus, (owned by Telecom Italia).
 
"That makes [access to] those cables dramatically more expensive than when you have more competitors," Wheeler said. "I would say [access] is anywhere from eight to 10 times more expensive [than in other regions]."
 
For NTT America, that means carrier customers buying its wholesale services are purchasing less capacity - and therefore generating less revenue - but demanding more for their money in terms of uptime and performance, he said.
 
"That creates a higher requirement around QoS and reliability," Wheeler said. "If there are problems occurring and [carrier customers] only have minimal capacity available because of cost … the impact is much bigger than if the connection were between London and New York or Los Angeles and Tokyo."
 

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