Latin America Data Center Colocation Market Outlook Report 2023: Increasing Adoption of 5G and Significant Investments in Submarine Cables Driving the $1.5+ Billion Industry - ResearchAndMarkets.com

The "Latin America Data Center Colocation Market - Industry Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.

The Latin America data center colocation market is expected to reach a value of $1.51 billion by 2028 from $950 million in 2022, growing at a CAGR of 8.10% from 2022 to 2028

The Latin America (LATAM) data center colocation market is experiencing a surge in growth, driven by the increasing adoption of 5G technology and significant investments in submarine cables. The deployment of vital cables like the Caribbean Express (CX cable) and Firmina cable, set to go live in the next two to three years, promises to enhance connectivity between the region and the rest of the world.

Governments across the LATAM region are actively promoting data center investments through various incentives and schemes. For instance, Colombia has established a free trade zone to attract data center investments. Furthermore, Patagonia is emerging as a data center hub in Chile, thanks to government-backed tax incentives aimed at bolstering the Latin America data center colocation market.

In Latin America, countries like Brazil, Chile, Argentina, and Paraguay are taking significant strides towards green data center development. Data center operators and governments in these nations are focusing on the adoption of renewable energy sources and other sustainability measures.

Industry leaders including HostDime, KIO Networks, and Scala Data Centers are leading the charge in constructing data centers in the Latin America data center colocation market with a Power Usage Effectiveness (PUE) of less than 1.5. Their efforts include harnessing renewable energy, implementing free cooling techniques, and optimizing IT infrastructure for efficiency.

Brazil, with colocation providers like Ascenty, Scala Data Centers, and ODATA, is a hotspot for data center investments. Leading telecom providers such as GlobeNet Telecom, Ava Telecom, and Embratel are also expanding their presence in the country, further boosting the growth of the Latin America data center colocation market.

Submarine cable projects are another significant area of investment in the Latin America data center colocation market, facilitating enhanced connectivity with other regions and countries. Mexico City has emerged as a prominent data center location within the country, boasting eight third-party data centers. Additionally, Cancun has become a key location with around six submarine cable landing stations.

Colombia is currently in the trial phase of deploying 5G network connectivity, with investments from operators like Nokia and AngloGold Ashanti Colombia.

Santiago, a major Chilean city, is experiencing robust data center development due to its strategic location and status as the economic and social capital. Leading operators in Chile, including ODATA, Ascenty, and EdgeConneX, are operating state-of-the-art facilities in Santiago.

Key vendors in the Latin America data center colocation market include Ascenty (Digital Realty), ODATA, Equinix, HostDime, CloudHQ, and Scala Data Centers. The market also witnesses frequent mergers and acquisitions among colocation vendors, such as Equinix's acquisition of Mexico-based data center operator Axtel and CyrusOne's purchase of stakes in ODATA.

Competitiveness among vendors is expected to intensify due to the high costs associated with acquiring modern security systems. Furthermore, Data Center Infrastructure Management (DCIM) and Building Management System (BMS) solutions will continue to play a competitive role by reducing operational expenses for data center facilities.

MARKET TRENDS & OPPORTUNITIES

Procurement of Renewable Energy in Latin America

Many renewable energy sources are available in different countries across Latin America, which can help to bring energy efficiency to industries such as data centers.

The rise in average industrial electricity pricing, in combination with the push toward sustainability across the region, has prompted operators to focus on renewable energy procurement via Power Purchase Agreements (PPAs). Over the last two years, several operators in Latin America have either procured or signed power purchase agreements to power their facilities in the region.

5G Deployments Fuelling EDGE Data Center Deployments

In Latin America, 5G network deployments have fueled digital transformation, IoT, smart cities, and the industrial revolution. Latin American countries are working toward adopting digital transformation to attract foreign investments. The 5G network deployment fuels digital transformation, IoT, smart cities, and the fourth industrial revolution. The rapid investment in 5G technology has increased the demand for high-bandwidth internet in Tier II and Tier III cities and contributed to generating substantial data.

These factors have accelerated data center development to process the information on par with major cities and simultaneously support the growth of Latin America data center colocation. The deployment of 5G services has impacted ICT, government, manufacturing, services, agriculture, and retail industries. 5G network services play a key role in supporting enterprise digitalization and will drive the adoption of IoT applications.

KEY QUESTIONS ANSWERED:

• How big is the Latin America data center colocation market?
• What is the growth rate of the Latin America data center colocation market?
• What is the estimated market size in terms of area in the Latin America data center colocation market by 2028?
• What are the key trends in the Latin America data center colocation market?
• How many MW of power capacity is expected to reach the Latin America data center colocation market by 2028?

MARKET DYNAMICS

Market Opportunities & Trends

• Emergence Of Generative Ai Tools Propelling Data Center Demand
• Modern It Equipment Often Requires Upgrades In Data Centers
• Modular Data Center Deployment Boosts Colocation Demand
• Enhanced Connectivity Leads To Edge Data Center Expansion

Market Growth Enablers

• Emerging Innovations In High-Density Cooling
• Focus Of Governments On Sustainable Data Centers And Renewable Energy
• Increase In Submarine Cable Deployments
• Digital Transformation In Latin America

Market Restraints

• Growth Barriers Due To Supply Chain Disruptions
• Concerns Over Carbon Emissions From Data Centers
• High Maintenance Costs For Infrastructure Components

VENDOR LANDSCAPE

Prominent Data Center Investors

• Ascenty
• AVA Telecom
• Equinix
• Edgeconnex
• GlobeNet Telecom
• OneX
• Scala Data Centers
• Claro
• Nabiax
• Gtd Peru
• Lumen Technologies
• ODATA
• Air Link Communications
• Belize Network Information Centre
• Blue NAP Americas
• Brac Informatics Centre (BIC)
• Digicel
• Epic.io
• Telecom Italia Sparkle
• KIO Networks
• Oxygen
• Millicom
• InterNexa
• Lumen Technologies
• Entel
• SONDA
• HostDime
• CloudHQ
• IPXON Networks

SEGMENTATION ANALYSIS

Segmentation by Colocation Service

• Retail Colocation
• Wholesale Colocation

Segmentation by Infrastructure

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by Electrical Infrastructure

• Ups Systems
• Generators
• Transfer Switches & Switchgear
• Power Distribution Units
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers & Dry Coolers
• Economizers & Evaporative Coolers
• Other Cooling Units

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

For more information about this report visit https://www.researchandmarkets.com/r/pbyz28

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