Telebras Lights Up Submarine Cable Strategy
Telebras, the Brazilian state-owned telecommunications backbone, data and broadband services provider, has shed more light on its plans to develop a comprehensive network of high capacity, fibre-optic submarine cable systems. The company plans to build five international cable systems that will link Brazil to the rest of the world and give it greater control over bandwidth prices which, ultimately, should spur further demand for affordable broadband services in the country. Telebras has just signed an agreement with Spain's IslaLink for a Brazil-Europe cable.
Previously, we have reported on Telebras' plans to establish cable connections to the US and Africa. The operator now says that those projects - which are at different stages of development - are part of a much larger project to develop a 24,000km fibre-optic ring in partnership with local, regional and international partners. In addition to the Brazil-US, Brazil-Europe and Brazil-Africa cables, a fourth cable system will connect the country with key markets in the Southern Cone, while a fifth will interconnect key population and business centres within Brazil and will likely be predominantly a terrestrial-based system.
According to Telebras president, Caio Bonilha, the operator will establish separate consortiums to build, manage and operate each of the five cable systems. The project is expected to require investment of BRL1.8bn (US$900mn), so spreading the cost among international partners would be a sound move for the state-owned company, which has only recently been revived after a decade of dormancy. In addition, the choice of partners is interesting. The European partner IslaLink is relatively small, as is the African partner, Angola Cables. Their small size means they are unlikely to set high bandwidth prices, which would be welcomed by carrier partners and their customers. The US partner and landing site has yet to be determined.
Brazil's broadband market continues to grow, with the number of data connections reaching 19.209mn by Q212, according to data supplied by Brazil's regulator, Anatel. Yet, the vast majority of connections offer comparatively low data transfer speeds as the high cost of broadband remains high due to local operators' reliance on global service providers' cables. The number of 12Mbps-plus connections fluctuates due to a lack of reliable infrastructure, as well as high costs. Higher capacity users are also suffering instances of service quality degradation as existing long-distance cables are prone to signal latency issues. BMI therefore see Telebras' new international cable strategy, on top of its existing commitments to overhauling Brazil's underpowered domestic infrastructure as being vital to the country's emergence as a Big Data hub in Latin America.