Could Brazil become a data hub?

. Jul 08, 2019
data hub brazil

Although many may assume the internet is something ethereal, floating through the air, the reality is that somewhere between 95 to 99 percent of the world’s data is carried via underwater cables. International emails, WhatsApp calls, video games, and live streaming are all made possible by fiber optic cables on ocean floors. And with the upcoming wave of 5G internet connection, these subsea cables will become even more important. 

For that reason alone, it is no wonder that tech companies spend millions laying them.

</span></p> <p><span style="font-weight: 400;">Google is one such company, recently announcing the extension of its subsea cable in South America, Tannat. The underwater cable was activated in late 2018 as a partnership between the tech giant and Uruguay’s government-owned telecom company Antel. It currently runs for 2,000 kilometers between Brazil and Uruguay, and is expected to expand to Argentina by 2020. </span></p> <p><span style="font-weight: 400;">Tannat isn’t Google’s only underwater cable going through Brazil. Its smallest, Junior, connects Rio de Janeiro with São Paulo’s coast, and its longest, Monet, runs all the way to Florida in the U.S. These three cables, along with another 16 owned by other companies, are what keep Brazil connected to the outside world.</span></p> <h2>Who owns Brazil’s subsea cables?</h2> <p><span style="font-weight: 400;">Unlike Uruguay, none of Brazil’s cables are under even the partial control of state-owned companies or agencies. In fact, ownership of Brazilian underwater cables is trending towards privatization. </span></p> <p><span style="font-weight: 400;">While the first batch of cables in the early 2000s saw investment from government-controlled agencies such as Portugal Telecom, Deutsche Telekom, and Telecom Italia Sparkle, all cables set for completion in upcoming years will be privately owned. This isn’t surprising, as the vast majority of cables worldwide are owned by private companies. </span></p> <p><span style="font-weight: 400;">There also seems to be a trend towards foreign-owned cables. The five projects set to finish by 2021 will be owned by one Irish company, one Argentine company, and four from the U.S. </span></p> <h2>Could Brazil become a data hub?</h2> <p><span style="font-weight: 400;">According to market research company Telegeography, there were 378 submarine cables around the world as of January 2019. The U.S., with over 90 cables and a prime geographical position, is by and large the most connected country. But Brazil certainly shows potential. Of its 19 cables, eight were activated since 2014 and five are expected to be ready by 2021.</span></p> <p><span style="font-weight: 400;">Brazil is an attractive market as it is the largest economy in Latin America and generates the highest demand for international bandwidth in the region, Telegeography told </span><b>The Brazilian Report</b><span style="font-weight: 400;">. Many of these cable routes connect to Florida, which is considered the main hub in the Americas. </span></p> <p><span style="font-weight: 400;">The oldest of Brazil’s active cables was built in the early 2000s, when the internet was still taking baby steps. Since then, developments in fiber optic technology have drastically changed the speed of data transmission. For example, submarine cable Ellalink, which is expected to be completed in 2020, promises up to 72 terabytes per second. That is 3,600 times faster than cables made at the beginning of the century. If all goes as planned, Brazil will have 13 cables with high-speed capabilities connecting to North America, Africa, and Europe, by 2021.</span></p> <h2>Implications for international relations</h2> <p><span style="font-weight: 400;">Subsea cables hold the same importance to modern international relations as trade routes did in centuries past. The ability to block or intercept data flow holds a lot of power, as does the ability to connect. </span></p> <p><span style="font-weight: 400;">The submarine cable EllaLink was famously commissioned in response to </span><a href=""><span style="font-weight: 400;">evidence that the U.S. government had been spying on then-President Dilma Rousseff</span></a><span style="font-weight: 400;">. It will be the first high-speed cable running between Europe and Latin America, promising speeds of up to 72 terabytes per second. </span></p> <p><span style="font-weight: 400;">Because the current cable is too slow to withstand large amounts of data, Brazil still relies on cable routes that pass through the United States in order to interact with Europe. It was only last year that the country became directly connected to Africa, and due to geographical position, routes to Asia are unlikely to be established.

Juliana Costa

Juliana is a growth strategist and contributor to The Brazilian Report

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