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Alloha to launch 3 calls for backbone upgrade project
![Alloha to launch 3 calls for backbone upgrade project](https://cdnimg.bnamericas.com/kXwGcceuqvGnUffSMvCShdQWduqrwjAaKoujqosREbWJhxDRqyAhTUbgVYovXgem.jpg)
Alloha Fibra, Brazil’s largest ISP holding company in terms of accesses, plans to launch three market calls as part of the modernization of its national optical backbone, Fabio Abreu, VP of networks and B2B, told BNamericas.
The company will invest a total of US$32mn in the project, which is set to be completed by the end of 2025.
“We’re increasing the capacity of our DWDM [optical systems], placing an IP network on top of our network and enhancing the capacity of our infrastructure. Alloha doesn't have a unified IP network at the moment,” said Abreu.
The project is part of a broader push to strengthen the B2B and wholesale area and increase the backbone’s capacity.
As it structured the project, Alloha is working on “traffic collector” rings to increase the resilience and capacity of its networks in different Brazilian regions, mostly in the northeast, north and mid-west.
Investments in the network rings in Fortaleza have been completed, as well as in greater São Luis and in a route spanning from São Luís to Imperatriz, in the state of Maranhão.
Alloha has now started investing in the network that runs from Imperatriz to Goiânia, the Goiás state capital, as well as in greater Teresina, capital of Piauí state.
Huawei and Nokia won the latest DWDM contracts.
Huawei walked away with the contract for the Imperatriz-Goiânia route, having already won the contracts for the rings in Belém and São Luís.
Nokia won the Fortaleza-Teresina-Brasília route and the one for Cipó-João Pessoa in the states of Bahia and Paraíba, respectively.
Of the planned US$32mn capex, US$15mn has been invested since January for the Nokia and Huawei contracts.
TRAFFIC OFFLOADING
The investments are also aimed at supporting the traffic flow through the interior of the country as a complement to longer routes – and consequently with greater latency – along the coast to the internet exchange points (IXPs) of Fortaleza, Rio de Janeiro and São Paulo.
These three metropolitan regions are the ones that concentrate the bulk of data in the country and where all companies will connect to exchange traffic and fetch content.
While these structures are not distributed to other parts of the country, companies in the interior of the country need to seek the most direct routes with the fewest stops possible – hence Alloha’s works with the fiber rings and redundant networks.
“Brazil, due to its size, will have to have an [IXP] in Manaus or in Belém, for example. It doesn’t make sense for a company to get Netflix, with 62ms of latency, on a route to São Paulo,” said Abreu. “The US has about 20 IXPs,” he added.
Abreu recognizes, however, that in addition to regional and edge datacenters, a broader expansion of the data network would be necessary, such as with submarine cables reaching the northern coast of the country.
At present, Alloha’s top three partners for international connectivity, via submarine cables, are Cirion, Seaborn and Telxius.
Telxius and Seaborn are studying new terrestrial routes in the country, BNamericas has learned, including Recife and Brasília.
In total, Alloha has more than 400 ISPs as customers in its network, in addition to dozens of operators of different sizes and market focus.
Currently, 18.5% of the company's revenue comes from the B2B area, comprising the wholesale, government and corporate segments.
The Alloha Fibra network reaches 864 cities in 22 states.
Alloha also claims to be present in over 1,500 points-of-presence throughout Brazil, including connections to the datacenters of Cirion, Ascenty, V.tal, Telxius, Angola Cables, and Tivit, among others, in Fortaleza, Rio de Janeiro and São Paulo.
GOALS
Alloha's goal for this year is to strongly accelerate sales compared to 2023, according to Abreu.
He said sales for the B2B area are now 45% higher than last year.
This growth, however, is still not enough to reduce churn-related losses and increase the company's overall revenue.
“We had an investment gap in terms of networks in the northeast for almost two years. This hiatus caused our churn to increase significantly. As VP of networks, I resumed all of the company's institutional discussions and since last year we have been investing in the region again," said Abreu.
The company also recently centralized all backbone management in a new network operations center in Mauá, São Paulo state.
In April, Alloha requested to be registered as a publicly held company with Brazilian securities regulator CVM – a move viewed in the market as a first step towards an IPO.
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