Global digital transformation requires global communications, which means more business for network service providers (NSPs). LATAM is in the midst of a digital transformation revolution, with IDC predicting that by 2022, more than 50% of Latin American gross digital product (GDP) will be digitized with growth in every industry driven by digitally enhanced offerings, operations and relationships.[i] IDC also estimates annual digital spending in Mexico will rise +4.4% in 2020 to US$24.3 billion, mainly due to government contracts for infrastructure improvements and growth in the manufacturing, banking and finance, retail and communications sectors.[ii]
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This rapid digitalization provides enormous growth opportunities for NSPs. Specifically, Mexico’s 2013 telecommunications reform classified internet access as a constitutional right for all Mexican citizens. As a result, by 2018, there were 82.7 million internet users, representing 71% of the population over the age of six, with 92% of internet users connecting through a smart phone. Also, efforts to improve market competition resulted in a 26% drop in prices for communications services in 2016, according to Mexico’s telecommunications regulator, the Federal Institute of Telecommunications (IFT).[iii]IDC predicts that Mexico Telecom Services revenues will increase 1.1% in 2020, to US $29 billion, which will most likely be a result of the government’s efforts to accelerate digital infrastructures around the country.i
Interconnected vendor-neutral data centers open the way to global digital and business ecosystems
The recent opening of three new Equinix International Business Exchange™ (IBX®) data centers in Mexico, two in Querétaro (MX1 and MX2) and one in Monterrey (MO1), opens routes for LATAM and multinational businesses to expand into lucrative Mexican markets, as well as provide new growth opportunities for Mexican enterprises and service providers that want to go global. Now, NSPs on Platform Equinix in Mexico can gain access to more than 10,000 Equinix customer worldwide. Currently, there are 15 NSPs in the Equinix Mexico data centers, with opportunities for more NSPs to join the global ecosystem on Platform Equinix®.
As more network providers find a home in our Mexico IBX data centers, content and digital media (CDM) and cloud service providers (CSPs), as well as other businesses, will follow, as we have seen happen in every one of our over 200 IBX data centers around the world. Today, there are more than 700 CDM firms and 2,900+ cloud and IT service providers on Platform Equinix.
Digital and business ecosystems require private interconnection that bypasses the public internet to deliver the greatest performance and security to its participants. The third annual Global Interconnection Index (GXI), a market study published by Equinix, predicts that private interconnection bandwidth between LATAM enterprises and digital and business ecosystems will grow exponentially between 2018 and 2022, as indicated in the chart below:
LATAM Interconnection Bandwidth Growth Between Enterprises and Digital and Business Ecosystems
LATAM enterprises interconnecting to Network Providers is the most prevalent scenario, however, the largest growth is in private interconnection between enterprises and Cloud & IT Providers (148%) due to the[JS4] large greenfield in LATAM for cloud services. And given the growth in LATAM financial services, retail, manufacturing and utilities sectors, it’s no surprise that private interconnection between enterprises and supply chain partners (104%) is the second-largest growth area. On Platform Equinix, regional and multinational companies can take advantage of a wide choice of partners and service providers, and leverage competitive pricing and proximate, low-latency connections for optimized performance and quality of user experience.
The estimated Telecom Services revenue in 2020.
Interconnection to major metro gateways around the globe
Interconnection on Platform Equinix via Equinix Cloud Exchange Fabric™ (ECX Fabric™) joins our Mexico data centers with major metro hubs in Los Angeles (LA), Dallas (Infomart) and Miami (Network Access Point of the Americas or “NAP”). ECX Fabric enables direct and secure interconnection to multiple digital and business ecosystems in North America and LATAM (Brazil and Colombia; subsea cable access to Chile via LA) as well as access to Equinix IBX data centers in major hubs around the world. Multinational companies in telecommunications, financial services, manufacturing, and media and entertainment can leverage optimized private interconnection to supply chains and customers worldwide.
We are excited to welcome regional and multinational companies to our new Mexico IBX data centers, where companies from around the world can connect to new opportunities that were previously out of reach.
Learn how Network Service Providers can leverage Platform Equinix to connect with more customers around the world.
[i] IDC FutureScape: Latin America IT Industry 2019 Predictions, December 2018.
[ii] IDC FutureScape Worldwide 2020 Predictions LATAM Implications, November, 2019.
The annual growth rate of private interconnection between enterprises and network providers.