Ufinet to deploy further 1,000km of fiber in Brazil by early-2024

Madrid-based Ufinet, the largest fiber optic infrastructure wholesale operator in Latin America, plans to deploy around 1,000km of fiber for its Brazilian network by early 2024, country manager Álvaro Britto (pictured) told BNamericas.

The company currently has approximately 2,500km of proprietary networks in the country. 

Ufinet is controlled by UK investment fund Cinven, Abu Dhabi Investment Authority (ADIA) and Italian power multinational Enel.

After establishing a presence in Latin America, the group entered Brazil in 2019 with the acquisition of fiber provider Netell, whose backbone was concentrated in São Paulo.

Two years later, it acquired Rio de Janeiro-based NB Telecom, adding another 500km of backbone to its footprint. However, the company still covers a very small portion of Brazil.

“Since then, we've been investing to expand these networks. They [Netell and NB] were mainly metropolitan networks. We're building long-haul networks, investing in metropolitan capillarity while also eyeing inorganic opportunities,” Britto told BNamericas.

The routes being deployed, between Rio de Janeiro and São Paulo, will run entirely through underground ducts. 

In addition to its own network, Ufinet has another 500km of third-party networks in Brazil.

NEW REGIONS

Beyond São Paulo and Rio, the company is looking to move into new regions of the country. 

That will be done particularly through acquisitions of companies with networks already established, given the challenge of expanding via greenfield deployments in a country with the size of Brazil, said Britto.

It has been challenging to find an asset with a good fit for Ufinet's network and these acquisition processes take some time. Furthermore, with the active internet service provider (ISP) market in the country and the rapid consolidation of broadband providers, the values of potential assets are impacted, but the executive hints that there could be purchases this year.

Competition is also intense among telecom wholesalers, connectivity providers and data transport networks for ISPs such as Ufinet. This has brought overall prices down in the sector at a time when costs of equipment and products remain high.

Britto expects consolidation to take place among wholesalers as well, ultimately stabilizing prices.

In Brazil, around 30 urban centers and capital cities are of particular interest to Ufinet for its expansion, in regions such as the midwest, northeast and south.

From a broader market perspective, Britto predicts that Porto Alegre, capital of Rio Grande do Sul state in the south, will become the next data and connectivity hub in the country in the coming years, after São Paulo-Rio and Fortaleza in the northeast.

NEUTRAL NETWORK AND FOOTPRINT

Ufinet tried in the past, but gave up investing to be a neutral fiber network format for carriers in Brazil, similar to what it does in other markets in the region, such as Colombia (serving ETB and Tigo). The company even considered bidding for Oi's fiber network.

The company's network in the region spans over 90,000km of fiber deployed in 14 markets: Mexico, Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Colombia, Ecuador, Peru, Brazil, Paraguay, Argentina and Chile.

The group claims to have over 54,000 buildings in the region connected to its network, with another 105,000 “feasible to connect”. It also reports having more than 5,000 towers connected and over 1,000 towers/poles leased for mobile carriers’ antennas.

Its largest footprint is in Colombia, with 25,000km of backbone covering practically the entire country.

In 2021, the company expanded in Ecuador with the acquisition of Nedetel’s network and its vast ISP customer base. At the time, the company committed to making an investment of US$250mn in the country.

Nedetel has 9,000km of fiber optics deployed and presence in 150 localities with access networks. The combination of both companies will result in a 12,000km network with multiple submarine and terrestrial departures.

Five datacenters will also be opened in Quito, Santo Domingo, Manta, Cuenca and Guayaquil.