Luis Fiallo has been in the telecom industry for over 25 years. And for the majority of that time, he has been at China Telecom Americas, witnessing the many changes happening in the Latin American telecom market firsthand.
After years of helping to drive CTA's growth in the region, Luis, now Vice President, has many valuable insights to share with TeleGeography Explains the Internet.
Since this episode primarily focuses on Latin American networks and cloud developments, I invited my colleague Peter Wood, TeleGeography’s Senior Analyst covering Latin America.
The three of us start with some history of networks in the region, going back to the days when even intra-South American traffic tromboned to Miami and back.
We also discuss the idea of directly connecting developing markets worldwide, without passing through the U.S. or Western Europe, and the economic connections between East Asia and Latin America.
Finally, we discuss the cloud and examine the areas of the Latin American telecom market that Luis considers the most important to develop in the coming years.
This episode took some unexpected turns, which is always a lot of fun. I hope you enjoy listening to it.
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Key Takeaways
Transformation and Localization
The Latin American telecom market has undergone a complete transformation over the past decade or so, moving away from a historical reliance on routing internet traffic back through hubs like Miami.
This change is marked by a substantial increase in localized content and infrastructure within the region. Countries like Brazil have seen a significant growth in the number of data center operators and facilities. Major U.S. and international OTT providers are now investing in and deploying local nodes in the region.
Further, there's been investment in strengthening infrastructure, including fiber-to-the-home deployments and consolidation in the ISP market creating stronger players with more capital to build out networks.
Growth and Increased Foreign Investment
The Latin American telecom market is experiencing strong growth, estimated to be a $40 billion market by 2028, and has been growing faster than the U.S. in recent years.
This growth is attracting considerable foreign investment, including from private equity and a notable influx of Chinese enterprises across countries like Brazil, Mexico, and Argentina. This investment helps strengthen the region's infrastructure and supports the emergence and growth of new local companies. Increased bilateral trade and commerce between Latin America and regions like Asia are driving the need for better communications.
Evolving Focus on Overlay Services and Edge Computing
The industry focus is shifting from solely building foundational network infrastructure to emphasizing overlay services and enabling digital transformation.
Companies are looking toward solutions like cloud services, managed IoT platforms, and CDN networks built upon existing or procured underlay. There's a growing demand for data center capacity, particularly smaller, more agile "edge" data centers, located closer to where data is generated.
This shift is driven by new technologies like IoT and the introduction of 5G, which require data processing and storage closer to the user or device. The network is increasingly viewed as a business enabler supporting various digital activities, rather than just a basic infrastructure cost.
