In the Digital Corridors blog series, we explore the interconnected regions that help make the digital world as we know it possible. Internet traffic flowing through these regions, with stops in major interconnected metros, provides the foundation for growing digital economies, connecting millions of end users and businesses nationally, regionally and globally. Perhaps one of the most interesting—and vital—digital corridors we see emerging today is around the Mediterranean Sea, landing on Europe’s southern and southwestern shores.
The Mediterranean plays an important role in enabling global connectivity because it occupies a prime geographic position between developed markets and new emerging markets. Countries in Europe and North America—in founding and developing the internet from its earliest inception and embracing positive regulation and competition—have evolved digital economies that many of their counterparts to the south are eager to emulate.
There is widespread recognition of the value the internet can drive, both for entertainment purposes and for more “serious” use cases like healthcare, education, commerce and financial services. This recognition is driving efforts to close the inter-regional digital divide. The Mediterranean is one area where we can gain a clear overview of the sum of those efforts: new subsea cable capacity.
We view the Mediterranean as a “shunt”, funneling digital telecommunications North to South between hemispheres and East to West between continents. The new subsea cable projects we see happening in the Mediterranean today—and the many service provider deployments that will spring up around their landings—will ultimately support economic growth for billions of people and thousands of businesses across Africa, Latin America and other parts of the developing world.
Equinix invests in alternative landing sites
As our colleagues discussed in a previous blog about the Mediterranean, Equinix is proud to take a leading role in building interconnected cable landing hubs across Italy, France, Spain and Portugal. While Marseilles has been the busiest subsea destination in Southern Europe historically, operators of the latest cable systems are seeking diversity of landing sites along the North Mediterranean coastline for many reasons, including improved resiliency in the event of force majeure or international incidents.
For this reason, we’re building and expanding our facilities adjacent to these alternative landing sites in places like Genoa/Milan, Lisbon and Barcelona. This includes the recently announced Equinix BA2, our new Equinix IBX® data center in Barcelona. Many of the new subsea cable projects that drive digital growth in emerging markets land at Equinix IBX data centers around the Mediterranean. For instance, 2Africa (which will circle the African continent and eventually be the longest subsea cable project ever built), lands its East African leg in Equinix facilities in Genoa (GN1)[1], Milan (ML5) and Barcelona (BA2). In addition, the leg serving West Africa terminates in Lisbon at Equinix LS1, with expansion into LS2 planned for 2024. Investing in these metros now places us in a great position to support future subsea cable projects as they arise.
Equinix locations in and around the Mediterranean
The wave of new subsea cable projects serving Sub-Saharan Africa that terminate around the Mediterranean is a response to the need for greater upstream internet capacity at competitive pricing, with the aim of stimulating internet adoption and digital economies in Africa. However, it’s important to remember that the Mediterranean corridor is truly global. For instance, EllaLink, which lands at our Equinix LS1 data center in Lisbon and MD2 data center in Madrid, was the first subsea cable to provide a direct link between Europe and Latin America. This will be the first step toward reducing Latin America’s dependence on the US for its global connectivity—not to mention significantly decreasing latency by providing a more direct route between the two continents.
Cable projects that pass from the Mediterranean through the Suez Canal will also provide increased subsea capacity to the Middle East and the Indian subcontinent. For instance, the India Europe Xpress (IEX) will connect the Mediterranean, the Middle East and India, while 2Africa Pearls—a branch extension of the main 2Africa system[2]—will do the same for the GCC countries. With the addition of Pearls, 2Africa will ultimately span three continents and provide connectivity for more than 3 billion people—about 36% of the world’s population.
Reaching “eyeballs” is the first step in stimulating the digital economy
The maturity of a digital economy can be quantified based on how much internet content is cached and distributed locally. For instance, most African nations—apart from South Africa and more recently Nigeria and Kenya—continue to look to Europe for internet content. This leads to high latency and increased transport costs, which inhibit internet adoption and use. As new applications become more data-hungry, the importance of keeping traffic closer to home and improving affordability for end users will only continue to grow. This is one reason the Internet Society set an “80/20” goal for internet maturity in African countries: at least 80% of traffic exchanged locally, and 20% or less exchanged internationally.[3]
The first step in achieving this goal is simple: build more subsea cable projects to serve emerging markets, create a glut of capacity and drive down upstream costs. The following steps are more challenging: addressing middle-mile and last-mile affordability through positive regulation aimed at stimulating innovation and choice. In practice, there has to be a clear vision and motivation for the various service providers and regulators to act for the common good. Subsea cable projects in particular are extremely expensive, so there has to be a significant incentive for companies to put in the money required.
Looking at some of the companies that invest in subsea cables in and around the Mediterranean—such as Meta with the 2Africa cable and Google with the Equiano cable—it’s easy to see what their incentive is. Namely, these are companies that participate in the “eyeball economy.” Their business model is all about getting eyeballs on screens to view content (and advertising) while providing valuable metadata.
For these companies, Africa is a particularly lucrative opportunity because there are currently more than 800 million Africans that aren’t using the internet at all.[4] Connecting even a small portion of that number is the new frontier for companies in the content and digital media (CDM) sector, including social media, gaming and on-demand video streaming. This is especially true since many of these companies have begun to reach the point of market saturation in Europe and North America.
Price erosion drives growth in the digital economy
Some people like to separate internet traffic into the serious and the frivolous: enterprise applications like banking, commerce, education and healthcare on one side and consumer applications like social media sites, selfies and cat videos on the other. When it comes to building digital maturity in developing countries, it’s typically the use cases some consider frivolous that are important drivers of change. To reach these new markets, companies like Google and Meta need their services to be accessible and affordable for millions of end users, and they’re willing to invest billions of dollars to achieve that goal. The greater social benefits of their investments—such as wider availability of telemedicine services—are positive consequences of this process.
New subsea cable landings are only the first step in closing the digital divide. However, given the right regulatory environment, ample competitive upstream capacity and downward pricing pressure, content providers, network carriers and ISPs are encouraged to deploy in greater numbers and compete to solve the middle/last mile “eyeball” affordability challenge. The virtuous cycle this creates will help close the digital divide and stimulate digital economies in developing countries.
The virtuous cycle has the following effects:
- First, it will unlock new digital applications, giving consumers more incentive to buy smart devices to access those applications.
- This will inspire manufacturers to ramp up production, driving down the price and making connected devices and data plans more widely affordable.
- More connected devices in use means more incentive to invest further in digital infrastructure.
The cycle will continue, resulting in more connected users, a wider range of use cases and a more robust digital economy. This is why we believe there’s a direct link between competition, price erosion of internet capacity and digital economy/GDP growth in developing countries.
Equinix is building the digital future—in the Mediterranean and beyond
Examining the Mediterranean region and its many digital connections to Africa, Latin America, the Middle East and other regions, it’s easy to see that closing the digital divide and stimulating digital economies is a truly global exercise. As one of the world’s largest colocation providers with a global footprint, we are eager to play our part in bringing about these positive changes wherever we operate.
At Equinix, we’re investing in hubs serving subsea cable operators in the Mediterranean, but we’re also thinking about where else those cables land and how we can support the 80% local caching and content distribution goal set by the Internet Society. That’s why we’re bringing carrier-neutral colocation and industry-leading digital services to emerging markets:
- West Africa: We announced our acquisition of MainOne in 2021. We now operate data centers in Nigeria, Ghana and Côte d’Ivoire, all of which are connected to Portugal via the MainOne cable system.
- South Africa: We’ve announced our first data center in South Africa, due to open in Johannesburg in 2024.
- Latin America: The EllaLink cable connecting Brazil to Portugal and Spain also lands at our Equinix SP4 data center in São Paulo. We’ve also announced an expansion into Chile and Peru and our second data center in Bogotá.
By integrating these countries into our global digital infrastructure footprint, we hope to support the growth of local businesses, while also supporting foreign companies looking to expand on the wave of global digital transformation.
For a closer look at our vision for distributed, interconnected digital infrastructure, in the Mediterranean and across the globe, read the Platform Equinix vision paper today.
[1] “2Africa Subsea Cable Makes First Landing in Genoa, Italy”, Meta, April 14, 2022.
[2] Kevin Salvadori, “2Africa Pearls subsea cable connects Africa, Europe, and Asia to bring affordable, high-speed internet to 3 billion people”, Engineering at Meta, September 28, 2021.
[3] Michael Kende, “Moving Toward an Interconnected Africa: The 80/20 Initiative,” Internet Society, July 2021.
[4] Carnegie Endowment for International Peace, “To Close Africa’s Digital Divide, Policy Must Address the Usage Gap”. Jane Munga, April 26, 2022.
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