Internet Boom in Brazil Also Drives Private Interconnection

Public internet growth in Brazil is taking off. In 2017, approximately 10 million new internet users were added that included a growing demographic that may surprise you. According to a survey published by the Brazilian Institute of Geography and Statistics (IBGE), between 2016 and 2017, Brazilian internet users grew almost 9%, from 116.1 million to 126.4 million (69.8% of the total population).[i] Out of the 10 million new internet users, 23% were 60 years old or older. As one would expect, the majority of new users were between the ages of 25 – 39, which is representative of the overall expansion of Brazil’s internet usage in both urban (80% of the total) and rural (41% of the total) areas.

“The use of the latest technologies, as in the case of the internet, has a faster adherence among young people. However, the rapid evolution of the facilities for its use has broadened its dissemination among all age groups and of both sexes,” said IBGE.

If you look at how many of these users are accessing the public internet, the study provides the following insights:

  • Households with web access rose from 69% to 75% over the year (even though the number of laptops and tablets in the home are falling). The primary use is sending messages via email applications, social networks, etc.
  • Mobile phones were responsible for 98% of the total internet access.
  • TV-based internet access rose from 11% to 16% between 2016 and 2017.

Internet growth and private Interconnection growth are both on a steep curve

Along with the increase in internet usage, there is a growing increase in Interconnection − the direct and private traffic exchange between businesses − in Latin America (LATAM). According to the second annual Global Interconnection Index (the GXI), the LATAM region is projected to be the fastest growing region in the world, with Interconnection Bandwidth capacity increasing at 59% compound annual growth rate (CAGR) between 2017 and 2021.[ii] Brazil’s two major cities, São Paulo and Rio de Janeiro, are expected to increase in Interconnection Bandwidth capacity by seven-fold during that time period.

According to the GXI Volume 2, installed Interconnection Bandwidth capacity for nine out of the 11 industries represented in LATAM is forecasted to grow at a greater than 60% CAGR. The three strongest industry sectors estimated to consume the most Interconnection Bandwidth capacity by 2021 will be:

  • Content & Digital Media (CDM) at 267 Tbps, which represents 35% of the total LATAM Interconnection Bandwidth consumption. CDM providers are localizing their content in the region and partnering with local internet providers – reducing the price of both internet access and private Interconnection.
  • Cloud & IT Services at 135 Tbps, which signifies the laser focus in enterprise cloud adoption in this region.
  • Banking & Insurance at 109 Tbps, which is the most established sector of all the industries in LATAM.

See the diagram below for all LATAM industries:

A focus on Interconnection to service provider ecosystems

The GXI Vol. 2 predicts enterprise Interconnection will grow by 71% CAGR. However, it will represent only 39% of the total Interconnection traffic in LATAM. By 2021, the largest share of LATAM Interconnection Bandwidth capacity is being driven by Network Service Providers (537 Tbps) working to enable greater Interconnection to North American and other global markets. Interconnection to Cloud & IT Providers makes up the second largest segment (116 Tbps) with an aggressive 109% CAGR, representing greater demand for more scalable and agile cloud-based services from growing LATAM businesses, both from companies deploying multicloud on-premises IT infrastructures and within colocation providers, such as Equinix.

The trends driving Interconnection growth

The increase in both public internet access and private Interconnection is reflective of the following macro, technology and industry trends as reported in the GXI. This includes: increased digital business usage, user urbanization, heightened cybersecurity, increasing data compliance regulations, and the development of business ecosystems, such as networks, clouds and CDM.

The regional acceptance of vendor-neutral colocation and Interconnection platforms such as Equinix, with its access to rich ecosystems of vital digital and business partners, is accelerating more cost-effective access to network, internet, cloud and content providers in Brazil. Platform Equinix® can significantly lower the bar to entry for both internet and private Interconnection consumers with solutions such as the Equinix Cloud Exchange Fabric™ (ECX Fabric™), which enables one-to-many virtual connections to multiple network, cloud and SaaS providers, even in metros where there is no local access.

The convergence of submarine cable systems, such as Monet, GlobeNet and Seabras-1 makes Brazil a growth hot spot for telecommunications, hyperscale cloud and CDM providers such as Microsoft Azure, AWS and Google. Equinix is home for cable system landing stations for these and many other global subsea cable owners and operators. Currently, Equinix International Business Exchange™ (IBX®) data centers are subsea cable enabled in 34 metros around the world.

Enterprises and service providers can also leverage Interconnection Oriented Architecture (IOA) best practices to build global, digital-ready IT infrastructures on Platform Equinix that reach everywhere, interconnect everyone and integrate everything. Our IOA Knowledge base provides access to playbooks and design patterns for networks, clouds, and content and digital media to help enterprises and services providers build their digital future.

For more information on global Interconnection growth, read the GXI Volume 2 report.

[i] Globo, “Brazil Wins 10 Million Of Internet In 1 Year, Points IBGE,” 12/2018.

[ii] Interconnection Bandwidth is the total capacity provisioned to privately and directly exchange traffic with a diverse set of counterparties and providers at distributed IT exchange points inside carrier-neutral colocation centers.