Where C&W sees LatAm wholesale telecom heading

By April 14, 2023 NEWS
Carmine Sorrentino

Vice President, Chief Commercial & Operating Officer

Liberty Latin America’s wholesale provider C&W Networks claims to have “the largest fiber optic network in the Pan Caribbean,” connecting over 40 countries and spanning more than 50,000km. Routes include the submarine cables Caribbean Optical-ring System (ARCOS-1), Colombia-Florida Express (CFX-1), EC-Link cable system, Fibralink, Maya 1, Eastern Caribbean Fiber Express (ECFS), Pan America (PAN-AM), the Pacific Caribbean Cable System (PCCS) and more.

Through its infrastructure, the company provides broadband and IP capacity to global, regional and local telcos, cable companies, ISPs and network integrators.

In March, C&W Networks hired Carmine Sorrentino as its new chief commercial and operating officer. The executive joined from Telecom Italia’s infra unit Sparkle, where he managed the Americas operations and also the Panama Digital Gateway datacenter project.

In this first interview after being appointed to the job, Sorrentino talks about his expectations for the market, areas of growth and data traffic opportunities.

BNamericas: What do you bring from Sparkle and what are your perspectives for the LatAm market this year?

Sorrentino: My idea when I decided to join the company came from the fact that I see a lot of opportunities ahead in the LLA group and Cable & Wireless. At Sparkle I’ve managed the North and Central America part for many years and at Liberty Latin America there is a key focus on this particular region.

I think we can really increase what we have in the markets where we are. Looking into the future, there are some very good opportunities with some new propositions and market positioning.

BNamericas: Liberty Latin America has a large geographic footprint, but with certain countries shining more than others. What are the brightest spots and growth drivers for C&W in your view?

Sorrentino: If you look at our coverage and footprint, the two main markets where we are are Colombia and Mexico. I’d say that these are the markets where we can grow in terms of customers, revenue, footprint, where we can focus for the future.
Of course, we’re in several other markets as well. We’re in Venezuela, for instance, but everybody knows the difficulties there. In the future, maybe Venezuela will get to become an important market. In terms of potential, it’s one comparable to the Colombian market, with much less infrastructure and connectivity. There’s not a focus today but hopefully in future it can be a bright spot.

In Central America, we do see huge potential in Panama, not necessarily in terms of broadband or traffic growth, as this is a small country, but we know that there’s activity in the future in which Panama could become an important hub in terms of digital connectivity.

You saw the agreement that the Panama government inked with Copernicus, from the European Community [sic], which should bring some connectivity, and we’re ready with our assets and investments there to try to capture the contents and traffic that eventually will grow in the coming years in the country.

BNamericas: Panama and Costa Rica seem to be competing to be this CentAm hub. Part of the industry bets on Costa Rica for datacenters. How do you see that?

Sorrentino: Before moving to C&W I was also the CEO of Panama Digital Gateway. The datacenter being built there should also be the landing of at least two new submarine cables. I was in that investment, the one pushing that investment.
The connectivity that there is in Panama in terms of submarine cables is much, much better than the connectivity you get today in Costa Rica. Costa Rica is an important hub, there are many hyperscalers that have business there, Amazon has good business
there. But what makes a hub important is the connectivity, the growth you may get from it. And this is the submarine cables.
Even in future projects, and there are several submarine cable projects, Panama is always there. You get cable coming from the Pacific and going to the Caribbean, in Central America, then north to Mexico. So it makes much more sense in terms of connectivity to have there a hub if you want to move a lot of traffic.

Panama is also the operations hub for LLA in Latin America. And it’s stable, the currency is the US dollar, etc.

BNamericas: You mentioned Colombia and Mexico as bright spots. Colombia is also well positioned for both Atlantic and Pacific international connectivity. Both markets, however, are highly competitive in retail and wholesale. Are economies of scale the key here?

Sorrentino: In Colombia you have the demand. But there’s also the fact that Bogotá is really far from the coast.
So in terms of connectivity and content, you do have major hyperscalers going to Bogotá, but the north part of Colombia could benefit from eventually more connectivity. Even to Panama.

It’s closer to Panama than Bogotá if you take Barranquilla, Cartagena or the northern coast of Colombia. The PCCS cable from Colombia to Panama has 10, maybe 20 milliseconds. It’s a shorter path than going to Bogotá.

Besides that, in Panama, due to the size, you reduce a lot the terrestrial part on the submarine cables, which in many cases is where you need to have redundancy.

BNamericas: How about Mexico?

Sorrentino: Mexico is now becoming more comparable to Brazil, a huge market. You see in Brazil data traffic moving from São Paulo and Rio now more to the northeast, in Fortaleza, and to the south in Porto Alegre. And I see this happening in Mexico too.

We’re in Mexico, though not in Mexico City, but we need to be ready, you know, to be the Fortaleza and Porto Alegre of the country. We’re trying to have our plan and pick up the traffic in those kind of zones in Mexico. Mexico has a lot of opportunities in terms of terrestrial connectivity, submarine connectivity. We’re keeping a close eye on that.

We do have infrastructure, in some cases unique infrastructure, because you have the ARCOS connecting Cancún directly to the US. We have some infrastructure other operators do not have. It’s a really good market which I think we need to focus maybe more on in the near future.

BNamericas: What are the ‘Fortaleza’ regions of Mexico? The western part of the country?

Sorrentino: There are opportunities in different regions. On the east part there is much to do. You have Yucatán, Cancún. But there is also the north, Monterrey, that still needs to be well served. There are opportunities on both sides.

Also the south of Mexico, if you have good connectivity coming from Central America, is an interesting opportunity.
In Colombia and Central America we have presence, we have more of a B2B business, whereas in Mexico now, from this point of view, we’re working more on the wholesale business.

BNamericas: Connectivity demands continue driving business in general in the region, but from a macro perspective there are important economic headwinds. How does C&W play that out?

Sorrentino: Many of these projects are long term. You focus a lot on the market and on what you can do in the long run.

The projects, the market, offer a good view on what is coming. There are new technologies, you have AI, you have metaverse.
Plus, there is a huge shift in the market today in terms of cables. To reduce costs, projects started to be more point to point, Monet, Seabras, etc.

In the future, if you think about edge computing point-to-point connectivity, you may need more structures. You can see that in Central America, in the Caribbean, where we connect so many islands and countries.

BNamericas: Would you say submarine cables serving the region for so many years are old, outdated, as some in the market say?

Sorrentino: I don’t think it’s much a matter of end of a lifecycle of these systems. You have cables working quite well for 50 years.

What we do see is that in some stretches, in some geographies, given the data surge and new technologies, you may need to increase capacity. In some countries traffic is growing 30% every year. There’s a lot of growth in Colombia.

But we don’t see any issue regarding the life of the systems. Besides, it takes at least three years to have a new cable.

BNamericas: Where are investments going to?

Sorrentino: We need to concentrate on the opportunities we have to grow in some markets we think are important. We will also continue to upgrade standards and maintenance on our networks.

We need to see during the year opportunities in terms of expanding the footprint. Maybe a small opening of a PoP in a country like Mexico that can change a little bit sales on our side. I’m still putting all the pieces together to have a more linear idea on what we need to do in infrastructure, PoP expansion and so on.