Equinix (Nasdaq: EQIX) is taking a bigger bite out of the Latin American market as its ALOG subsidiary that it purchased in 2011 has built a second International Business Exchange (IBX) in Rio de Janeiro.
The data center provider said the new facility, which is known as RJ2, will enable it to more rapidly respond to customers that are either extending their presence in the region or making a move there for the first time.
Initially, RJ2 will provide support for 320 equipment cabinets. After completing a $36 million investment in the next two construction phases, the facility will be able to house a total of 1,170 cabinets.
Through its ALOG subsidiary, Equinix currently operates two other data centers in Rio and Sao Paulo, which are known as Sao Paulo 1 and 2 and Rio 1 that support all of the country's major service providers and serve over 800 companies.
"We've been growing out the Sao Paulo 2 facility, but the launch of the Rio 2 gives us our first Equinix quality colo that's 20 miles away from the Rio 1 central node," said Mark Adams, Chief Development Officer for Equinix. "It's really is an opportunity to give growth and expansion for our customers."
Adams added that in the case of Brazil "we will be the first international player that will have presence in both Rio and Sao Paulo, which is critical in terms of meeting the increase in the amount of cables going down to the region."
Equinix's timing to grow its Latin American data center presence could not be better. A recent TeleGeography study said that demand for bandwidth from the U.S. to Latin America grew 70 percent per year between 2007 and 2012.
Bandwidth demands will increase as local and international network broadcasters, ISPs and mobile operators increase capacity to support major events such as the upcoming World Cup.
"With the upcoming World Cup and Olympics, we're seeing a wide range of television broadcasting and media players setting up their infrastructure to support that down there, and it's both the international players coming as well as people standing up the infrastructure to support the domestic market," Adams said.
To support that growth, Equinix has established connections with all of the major subsea cable operators including Level 3 (NYSE: LVLT) and Telefonica, and other service providers serving Brazil.
Complementing its buildouts in Brazil, Equinix announced GlobeNet's expansion into its Miami data center (MI3), opening an IP traffic route from the United States to Brazil. The MI3 data center can reduce network latency by offering direct connectivity to major Latin American service providers.
While recognizing the potential of serving other Latin American countries, Adams said Equinix's initial focus is to master the work it is doing in Brazil.
"We have looked at opportunities in Chile, Argentina and Colombia, but to be honest since it's our first foray into Latin America and Brazil is the only Portuguese country and all of the others are Spanish so there's quite a language difference," he said. "We survey all of our customers biannually and ask what countries aren't we in that you want us to be in and that's what guides our global expansion."
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Updated article on Sept. 27 with headline to reflect second data center in Rio de Janeiro, Brazil and quotes from Mark Adams, CDO for Equinix .