The three countries Liberty Latin America is targeting for datacenters

Panama, Costa Rica and Mexico are the countries where Liberty Latin America is seeing most opportunities when it comes to the datacenter ecosystem, CEO Balan Nair told investors in an earnings call on Wednesday.

In Mexico, the company is building fiber to connect datacenters in the Cancún area and in Querétaro, which is the country’s main datacenter hub. 

Ray Collins, senior VP for the Liberty Networks B2B and connectivity unit, added the system the company is developing, linking Mexico’s Veracruz state to the Apalachee coast in Florida, up to Virginia and Georgia and down to Colombia, is meant for this segment.

“The new network that we’ve announced is really all about serving the hyperscale datacenter traffic,” said Collins.

Panama and Costa Rica, for their part, stand out on the datacenter map by being countries enrolled in the US Chips Act program to receive investments in semiconductors, according to Nair. 

“You can see Intel building in Costa Rica. So we are also hyper-focused on that,” he said.

According to the CEO, Liberty Latin America has been building micro datacenters for specific customers in a number of markets, while it has a main datacenter in Curaçao both for internal operations and for external customers.

Despite that, operating directly in the datacenter segment on a large scale remains off the radar for now.

COSTA RICA

Nair also commented on the recently announced deal to merge the operations of Liberty Costa Rica and Millicom’s Tigo.

According to the executive, the transaction in Costa Rica is expected to improve the local fixed market structure, create cost synergies, bring cross-selling opportunities in fixed-mobile convergence to Tigo’s customers, and enable fiber-to-the-home (FTTH) investments.

Liberty Latin America expects the transaction to be completed during the second half of 2025.

Meanwhile in Puerto Rico and the US Virgin Islands, LLA got all the approvals, including from the FCC, to absorb 100MHz of spectrum from Dish, which is expected to further strengthen the company's 5G mobile network.

PUERTO RICO HIT

LLA’s Q2 revenues were flat year-on-year at US$1.12bn whereas operating income declined 18% to US$111mn, as the company took a hit from incremental subscriber-migration costs in Puerto Rico.

Liberty Puerto Rico’s sales were US$309mn, down 12% year-on-year, but the company said it expects an improvement towards the end of the year. 

Considering all its businesses and subsidiaries, growth in the quarter was fueled by C&W Panama and Liberty Costa Rica, both with revenues up 9% year-on-year to US$197mn and US$147mn, respectively.

C&W Caribbean’s sales were up 3% to US$368mn, while Liberty Networks’ revenues were flat at US$119mn.

HURRICANE EFFECTS

LLA projects that the impact of Hurricane Beryl in July will impact revenue and adjusted OIBDA by US$10-20mn throughout the remainder of the year. 

Additionally, the telco projects up to US$20mn in costs to replace damaged infrastructure and equipment.

Beryl hit mostly LLA's Jamaica operation followed by those of C&W Caribbean in Grenada and St Vicent.

VENEZUELA AND ARGENTINA

Questioned about Venezuela, Nair said Liberty Latin America has no plans to go back to the country but added that its board continues to assess the political temperature and how the market evolves.

The company has certain Venezuelan customers for the submarine cable business who pay Liberty Latin America in US dollars, but the situation in the country still does not provide room for reinstating offices and direct operations, he said.

The same, the CEO said, applies to Argentina.

“Once the political turmoil changes there [Argentina], it could be a really good market. We look very closely at all these markets. And when the time is right, we’ll be very opportunistic. But right now I don't see it.”

CUSTOMER BASE

LLA ended June with nearly 4mn fixed and 7.91mn mobile subscriptions, following net additions of 19,300 and of 20,800, respectively, during the second quarter.

The results were largely driven by strong mobile growth in Panama, where the Más Móvil subsidiary won customers following the exit of Digicel, and by gains in Costa Rica.

According to the company, both Costa Rica and Puerto Rico provide future "catalysts" for growth.

LLA’s full Q2 and H1 results can be seen here.