TelCables Brasil advances second datacenter, readies new PoPs

TelCables Brasil, a subsidiary of multinational Angola Cables, is progressing on schedule with its second local datacenter while readying new points-of-presence (PoPs) at third-party datacenters, the firm's head of Latin American sales, Guilherme Vieira, told BNamericas.

The group currently operates 11 PoPs in Brazil of a total of 33 worldwide, installed in the datacenters of Elea Data Centers, Equinix, Ascenty and Vivo, among others.

The most recent PoPs were activated in Brazil's central-west region. They are in the cities of Cuiabá, with structures in the datacenters of Brasil TecPar and Vivo, as well as in Goiânia (datacenter Aquarius Center) and federal capital Brasília (Elea).

TelCables reports 17 customers for these central-west PoPs, after just over a year of operation.

In Rio de Janeiro, TelCables has a PoP at Equinix’s RJ2 datacenter; in São Paulo, it has PoPs at Equinix’s SP2, SP3 and SP4 datacenters, and also has one at Ascenty’s SP2 facility.

In addition to its own AngoNap datacenter in Fortaleza, launched in 2019, TelCables also has PoPs at V.tal and Ascenty’s datacenters in that city.

ANGONAP 2

The activation of its Angonap 2 site in Fortaleza is due to take place in 2026. 

The project was announced in January this year with 400mn reais (US$72mn) in estimated capex.

Work on the new site, which will be adjacent to the company's existing datacenter and will cover approximately 960m2, were expected to begin in the second half of this year, but have not started according to Vieira.

The group is looking at reformulating and possibly expanding the project's original design, hinted Vieira, adding that certain details are yet to be announced.

“We're having some internal talks regarding the size and business model for the project. Datacenters are booming in Brazil and Latin America. But this is still being discussed at the board level,” he said.

MARKET DYNAMICS

From a broader perspective, the outlook for the data and connectivity business in the country is improving, according to the executive.

The pandemic and the consolidation of internet service providers (ISPs) created strong tailwinds for the industry, although the crisis at Oi, the country's third-largest fixed broadband operator, was something of a headwind.

The reasoning behind the consolidation effect is that with more capital and stronger companies following mergers, there has been a focus on growth, driving increased demand in the overall network and data ecosystem.

However, after significant consolidation activity between 2019 and 2022, this trend has slowed in recent years.

“We’ve observed a reduction in the volume of ISP acquisitions by the largest market consolidators. Major investment funds have been purchasing less,” he noted.

Simultaneously, the expansion of fiber broadband has lost momentum, resulting in a slowdown, higher churn among providers and price reductions – all of which have negatively impacted the wholesale business.

To mitigate these challenges, Vieira explained that Angola Cables/TelCables diversified its portfolio to reduce reliance on pure connectivity and telecommunications.

“Our primary customers are wholesalers who sell to other providers. They began renegotiating prices. While we continued to sell and the market kept growing, price erosion has been significant in recent years. We're still seeing this in 2024.”

Looking ahead, there is optimism for stabilization and improvement by 2025, with a resurgence in large mergers and acquisitions among major ISPs, driven by investment funds.