Brazil's digital economy and datacenter industry stand to gain from a wave of new subsea cable system investments

April 23 2019
by Dan Thompson, Emily Wentworth


In the past two years, various new subsea cable systems with landing points in Brazil have come online, and several cables are currently under construction. These undersea cables, particularly the transoceanic ones, are wins for Brazil's digital economy and datacenter industry. The cables help to accommodate global data traffic, reduce latency, stream content, provide access to cloud services and subsequently help datacenter providers better serve their customers. Aside from telcos, investors in these new projects include Google, Facebook, Seaborn Networks and SAEx. Although São Paulo and Rio de Janeiro steal the show when it comes to Brazil's datacenter markets, Fortaleza is the biggest landing hub for subsea cables and a few providers have chosen to build facilities there.

The 451 Take

Connectivity to global content, cloud, network and other technology providers has become increasingly instrumental for a digital economy to thrive, and physical infrastructure is still needed to facilitate that connectivity. New undersea cable systems are giving Brazil, a less mature market with some barriers to growth, the foundation it needs to develop. Already providers have noted that the recently installed subsea cables have helped lower data traffic costs and distribute content better, so we expect the projects scheduled for completion in 2020 to deliver even more benefit. Providers that seek to take advantage of these new routes by having datacenters where they land and better connectivity options as a result, will have a competitive edge. Although prompted by the infamous Snowden leaks as a means for Brazil to bypass the United States with its communications to Europe, ultimately these cables will improve data transmissions between LatAm and Europe by way of shorter routes. Fortaleza is a major submarine cable landing point and one of Brazil's most populous municipalities, so it wouldn't be surprising to see more datacenters appear there.

The Brazil multi-tenant datacenter market and the impact of subsea cable systems

Within the continent of Latin America, Brazil has the largest MTDC market and the highest GDP at purchasing power parity, yet São Paulo, the country's top market, is still smaller (by amount of operational square footage) and less mature than metro area markets in North America and Asia. It is possible that slower adoption of colocation in Brazil and other Latin American countries could be traced to a lack of trust in outside companies or that investors have been unwilling to fund leased datacenter businesses. Latin America also has much lower overall rates of digital adoption among businesses and households compared with the East Asia and Organisation for Economic Co-operation and Development (OECD) averages. For Brazil in particular, several taxes and tariffs on IT services and equipment are also impediments to market development.

Despite this, several factors and trends are continuing to drive market growth. One of these is subsea cable systems, which while transporting data traffic internationally, bringing content and various technology services across continents and also affect the datacenter industry and specifically where datacenter providers choose to build. Serving as a landing point for a cable system is desirable for colocation providers because it allows them to provide more connectivity options for facility tenants, thereby increasing their attractiveness to customers as more than just supplier of space and power for IT infrastructure. As cloud adoption continues to grow, enabling access to cloud providers and reducing latency between clouds in various regions has become increasingly important, and because of this, Brazil stands to benefit from subsea cable investments thus far and in the future. Furthermore, internet connectivity in Brazil has historically been expensive, but recent subsea cable activity has ultimately helped to bring down costs and increase network efficiency overall, through reduced latency and improved content distribution.

Landing hubs

While the greater São Paulo region gets most of the attention in Brazil's MTDC industry as the financial and commercial heart of the country, other cities in Brazil are important from a submarine cable standpoint. Fortaleza, a port in the north of Brazil, is a main landing hub for submarine cables. The state capital of Ceará, Fortaleza is a top tourist destination in Brazil, known to draw in visitors for its beautiful beaches. The city has over 2.6bn residents; although not as populous as São Paulo or Rio de Janeiro, it still holds industrial and economic importance for the country. Fortaleza has become the landing destination for two-thirds of the subsea cables passing through Brazil, and a few datacenters have cropped up there as well. The most recent build is the Angonap datacenter, which connects to the Sangano landing station in Angola, Africa, through the South Atlantic Cable System (SACS) owned by Angola Cables. Brazilian wholesale provider Ascenty also owns a datacenter in Fortaleza. Various cables also pass through Santos and Praia Grande, adjacent coastal cities in the state of São Paulo, as well as Rio de Janeiro and Salvador, a city in the northeastern state of Bahia.

Figure 1
Figure 1: Landing points of Brazil's international subsea cable systems 451 Research

Recent subsea cable activity

Brazil has seen a rise in subsea cable projects within the past couple of years. Twelve submarine cables are in development phases or have begun operations since 2017. The country has 19 planned or operational cable systems in total, counting both transatlantic and domestic routes. Brazil's first submarine cable systems, launched about the end of the 20th century/start of the 21st century, are built and operated by telecommunications firms, as is the case in other parts of the world. Now, newer cable projects are being spearheaded by different types of players, including independent cable operators and content and technology providers.

The Monet cable system, owned by Angola Cables, ANTEL, Google and Algar Telecom, connects Boca Raton, Florida, with Fortaleza and Santos. It was completed in December of 2017. Historically, cables going through Miami have handled almost all of Brazil's data traffic abroad but concerns about the US government's ability to intercept data after the Edward Snowden leaks in 2013 have led to a push to build undersea cables that connect directly to Europe and Africa. The Brazilian government's initial outrage, which entailed the decision to exclude involvement of US firms in the construction of the EllaLink cable, has since subsided, but projects are still underway. EllaLink and Alcatel Submarine Networks (ASN) are developing the EllaLink Submarine Cable System, slated for operation in 2020, which will connect datacenters in Fortaleza, São Paulo, Lisbon, Madrid and Marseille, as well as The Canary Islands and Cape Verde. The system will deliver 72Tbps of capacity over four fiber pairs. The aim of the cable on the Brazilian side is to ensure data privacy between the two continents, open up the internet economy and facilitate new services from Europe and opportunities between Spanish-speaking and Portuguese-speaking businesses. Atlantis 2, the existing cable that connects Brazil with Europe, has a 20-gigabyte capacity, which is inadequate for today's levels of data transmission. The South Atlantic Cable System (SACS), operational since October 2018, is the first submarine cable to directly link Africa with South America across the southern Atlantic Ocean. SACS spans 6,500km, or 4,039 miles, and connects to the Monet cable and the West African Cable System (WACS). The route cuts down latency from 350 milliseconds to 63 milliseconds, increasing the speed of data transfer fivefold, according to Angola Cables CEO António Nunes.

Also under development is the South Atlantic Express (SAEx1) route extending from Virginia Beach to Fortaleza and then Cape Town, the first phase of a large project that also plans to connect Cape Town to Singapore and India via its South Asia Express cable (SAEx2). Yet another cable that will connect South Africa to Fortaleza is Seaborn Networks-owned SABR, which is expected to be ready for service by next year. It will link up to Seabras-1, which directly connects São Paulo with New York, so that the path between the US and Cape Town will have only one stop, thereby making data transfer along the route faster and cheaper. SABR will also connect to IOX, a cable under development that will go from Cape Town to India through Mauritius. ARBR and Malbec, set to come online in 2020, will improve connectivity between Argentina and Brazil.

Figure 2: Planned or operational subsea cables since 2017 Figure 2: Planned or operational subsea cables since 2017

Cable Name

Launch Date


Brazil Landing Points

Other Landing Points

South Atlantic Express (SAEx1)

Q1 2021

SAEx International Ltd


Cape Town, South Africa; Georgetown, Saint Helena, Ascension and Tristan da Cunha; Virginia Beach, Virginia



Seaborn Networks


Cape Town, South Africa



Werthein Group, Seaborn Networks

Praia Grande

Las Toninas, Argentina


Q2 2020

GlobeNet, Facebook

Praia Grande, Rio de Janeiro

Las Toninas, Argentina



EllaLink Group

Fortaleza, Praia Grande

Funahcal, Portugal; Kourou, French Guiana; Praia, Cape Verde; Sines, Portugal


Q3 2018


Rio de Janeiro, Santos


South Atlantic Cable System (SACS)

October 2018

Angola Cables


Sangano, Angola

South Atlantic Interlink (SAIL)

September 2018

CAMTEL, China Unicom


Kribi, Cameroon


December 2017

Angola Cables, Antel Uruguay, Google, Algar Telecom

Fortaleza, Santos

Boca Raton, Florida


Q1 2018

Google, Antel Uruguay


Las Toninas, Argentina; Maldonado, Uruguay




Fortaleza, Rio de Janeiro

San Juan, Puerto Rico; Virginia Beach, Virginia



Seaborn Networks

Praia Grande

New York, New York

451 Research