Data in the Andes

Major investments in digital infrastructure in Peru and Chile.

Equinix, a US company that specialises in internet and data centres has recently acquired four data centres in Peru and Chile for USD 705 million. The announcement is reflective of an increasingly lucrative trend where data centres function almost akin to a real estate business where spaces can be sublet. The operator rents the land and sets it up with equipment to provide storage and cloud services to other companies. Equinix, among other similar outfits, is migrating to having its own servers where its clouds are hosted. Then the data centre rents that space to companies. 

A telecoms expert in Peru explained, “The main variables are electricity and the issue of response time in the event of a service outage. In Peru there is only one small data centre, owned by Entel, which is just 8% of its total operation, the rest is in Chile, which has the largest data centre infrastructure in South America. So Equinix has entered the market by buying a major share of the infrastructure.”

“…Equinix has entered the market by buying major infrastructure. This business is booming and the cloud is also booming.”

A telecoms expert, Peru

Equinix is entering the market with a strong statement. The reason for the sale to Equinix, from Entel, is that as a data centre operator it is not a direct competitor of Entel, since Entel’s business is not that of data centres. In Chile, Entel was the largest data centre operator. In Peru, it is different because the largest data centre operators are not telecoms, but rather IBM.  

What are the key challenges? “There are several challenges that exist beyond pure electricity generation or socio-political issues. Another risk in the Andean region is the threat of natural disasters, for example the earthquake in Chile in 2007. At that time, all the servers went down except for Entel’s since they were not located in the capital Santiago which was badly affected,” explained the telecoms expert. 

“There are several challenges that exist beyond pure electricity generation or  socio-political issues [there is also] the threat of natural disasters…”

A telecoms expert, Peru

Digital infrastructure in the Andean cone lags well below regional peers but this could be changing. The level of maturity of the economies, especially in Peru, has seen a migration of medium-sized companies  having their own data centres. Increasingly, the public sector is driving this data migration to the cloud. Equinix’s acquisition is unlikely to be its last.  

Important Notice
While the information in this article has been prepared in good faith, no representation, warranty, assurance or undertaking (express or implied) is or will be made, and no responsibility or liability is or will be accepted by Deheza Limited or by its officers, employees or agents in relation to the adequacy, accuracy, completeness or reasonableness of this article, or of any other information (whether written or oral), notice or document supplied or otherwise made available in connection with this article. All and any such responsibility and liability is expressly disclaimed.
This article has been delivered to interested parties for information only. Deheza Limited gives no undertaking to provide the recipient with access to any additional information or to update this article or any additional information, or to correct any inaccuracies in it which may become apparent.

Most recent in TMT

Bulk Buying 

Argentina's quest to bolster National Defence with historic fighter jets purchase.

Data Dreams

Empowering Mexico's digital frontier.

Speed dial

Anatel's approval of Winity-Vivo sharing agreement in Brazil.

Bolivia’s fibre fiesta

ENTEL’s fibre optic expansion exerts further dominance over the competition.

Starlink: Shooting for the stars

Revolutionising internet connectivity and bridging the digital divide in LatAm.

5G rollout

Brazil’s rapid deployment of 5G is leading the region but others are struggling.

Game on

Latin America’s gaming industry continues to grow, even after a pandemic related boom.

Emerging tech

Colombia’s aspirations to become a regional tech hub face obstacles.

Ad-ding up

Strong advertising growth in LatAm looks unlikely to be repeated in 2023.

Digital divide

5G continues its expansions across Latin America but challenges remain.