1h Free Analyst Time
The Latin America Data Center Colocation Market was valued at USD 1.12 billion in 2023, and is projected to reach USD 1.81 billion by 2029, rising at a CAGR of 8.33%. Speak directly to the analyst to clarify any post sales queries you may have.
KEY HIGHLIGHTS
- Several governments across the LATAM region have initiated schemes and incentives to attract data center investments and contribute to the growth of the Latin America data center colocation market. In Colombia, a free trade zone has been introduced. Likewise, Patagonia is emerging as a data center hub in Chile, as the government has planned several tax incentives to grow the data center market.
- Data center operators, such as HostDime, KIO Networks, Scala Data Centers, Elea Data Centers, and other operators, are focused on building data centers with a PUE of< 1.5 in Latin America via renewable energy, free cooling, and efficient IT infrastructure.
- The major colocation service providers in the Latin American data center market include Ascenty (Digital Realty), Ava Telecom, Equinix, GlobeNet, HostDime, ODATA (Aligned Data Centers), Scala Data Centers, Elea Data Centers, Telmex, and Tigo Business, which spend millions of dollars for the development of their facilities.
MARKET OPPORTUNITIES & TRENDS
Boost In 5G Connectivity Due to Edge Data Center Developments
- In Latin America, 5G connections will account for about 60% of the total mobile connections by 2030. The deployment of 5G networks will power modern edge devices, remote working, and further advancements in related technologies. Brazil is leading the way in 5G technology deployments. Other countries, including Mexico, Argentina, Colombia, and Peru, are in the trial stage. Furthermore, in December 2023, Colombia’s Ministry of Information Technologies and Communications (MinTIC) authorized Claro, Partners Telecom Colombia (WOM), Union Temporal Colombia Móvil-Telefónica, and Sociedad Futura Telecall Colombia to get on board with the 5G auction, that is likely to generate a revenue of about USD 500 million.
- The rising deployment of 5G services and the growth in demand for connectivity in new locations and Tier I and II cities have attracted investments from edge data center operators. For instance, edge operators, including Surfix Data Center, Brisanet, V.tal, and EdgeUno, invest in establishing multiple edge data centers across Brazil, Chile, Colombia, and Mexico.
Increase in Sustainable Initiatives
Latin American governments, such as Brazil, Chile, Mexico, and Colombia, have set sustainability targets. They work together to diversify their electrical networks to support the policy and regulatory changes that encourage using renewable energy sources. Brazil, Chile, and Mexico have tremendous influence among their neighboring countries, allowing them to present their renewable energy policies as a viable model for the other countries in the region to follow suit.Digital Economy
- Governments and other regional organizations have taken initiatives to develop and grow the digital economy in the region. These initiatives aim to increase the region's digital transactions and smart payment technologies, which are prevalent in India, the UAE, and the US. According to the World Bank Group, about three-quarters of the Latin American population has internet connectivity, yet 35% of the individuals still prefer cash to digital payment methods.
- In January 2024, Amazon customers in Mexico could choose Kueski Pay, a Buy Now Pay Later (BNPL) option. This provides the purchase plans of 12 bi-weekly installments through linked bank accounts, debit cards, or cash under respective networks.
SEGMENTATION INSIGHTS
- The transition toward a sustainable future is evident among data center operators in the Latin America region. For example, in May 2024, Scala Data Centers conducted a trial using hydrotreated vegetable oil (HVO) to power its backup generators.
- The Latin America data center colocation market is increasingly adopting advanced cooling techniques, including air-based and liquid-based systems. Innovations such as liquid immersion cooling and cutting-edge air conditioning technologies have been implemented. Given the high temperatures in certain Latin American countries, data centers are prioritizing investments in cooling infrastructure.
- Major electrical infrastructure providers in the region - such as Eaton, Caterpillar, Cummins, Legrand, ABB, Rolls Royce, and Schneider Electric - are collaborating closely with data center operators to equip facilities with reliable electrical infrastructure. This includes uninterruptible power supply (UPS) systems and generators to ensure at least N+1 redundancy. A notable example is KIO Networks' BOG 1 data center, which utilizes Cummins diesel generators.
- There has been significant growth in the establishment of data centers within the region, particularly those achieving Tier III and IV certifications. All newly built data center facilities are certified as either Tier III or Tier IV by the Uptime Institute.
Segmentation by Colocation Type
- Retail Colocation
- Wholesale Colocation
Segmentation by Infrastructure
- Electrical Infrastructure
- Mechanical Infrastructure
- General Construction
Segmentation by Electrical Infrastructure
- UPS Systems
- Generators
- Transfer Switches & Switchgear
- PDUs
- 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 Cooling Techniques
- Air-based Cooling
- Liquid-based Cooling
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
REGIONAL ANALYSIS
- Brazil has multiple colocation providers, such as Ascenty (Digital Realty), Equinix, Scala Data Centers, ODATA (Aligned Data Centers), Elea Data Centers, and others. Several telecom providers, namely GlobeNet Telecom, Ava Telecom, and Embratel have expanded their presence in the country. Colocation operators lead investments in the country and are expected to witness further growth with several new project announcements.
- In 2023, Brazil led the Latin America data center colocation market, accounting for over 48% of the market share in investments, followed by Mexico, Chile, and Colombia.
- Several countries in the region are actively involved in establishing Special Economic Zones (SEZs), Free Trade Zones (FTZs), Export Processing Zones (EPZs), business parks, and industrial zones, which provide attractive benefits, such as tax incentives for international businesses.
- The Latin America data center colocation market saw growth potential in subsea cable projects, connecting it with other regions and countries across the planet. Mexico City has emerged as the primary data center location in Mexico, with eight existing third-party data centers. Cancún has emerged as another major location with about six submarine cable landing stations.
- Santiago, the Chilean capital, has witnessed data center development due to its strategic location and its economic and social capital. Most data center operators in Chile, such as ODATA (Aligned Data Centers), Ascenty (Digital Realty), and EdgeConneX, primarily have data centers in Santiago.
- Among Latin American countries, Brazil, Columbia, Argentina, and Paraguay have actively adopted renewable energy for most of their energy needs, significantly reducing their respective carbon footprints.
- Mexico is also expected to ramp up its renewable energy adoption in the forecast period, following the worldwide trend of promoting the use of renewable energy. In 2023, just over 30% of the overall energy mix was renewable in the country.
Segmentation by Geography
- Latin America
- Brazil
- Chile
- Colombia
- Mexico
- Rest of Latin America
VENDOR LANDSCAPE
- Ascenty (Digital Realty), Scala Data Centers, ODATA (Aligned Data Centers), Equinix, HostDime, KIO Networks, EdgeConneX, Angola Cables, Cirion Technologies, Elea Data Centers, and V.tal are some of the key companies in the Latin America data center colocation market making investments in the development of multiple data center facilities in 2023 and later.
- Layer 9 Data Centers, Ada Infrastructure, Surfix Data Center, CloudHQ, and DHAmericas are some of the new entrants into the Latin America data center colocation market currently involved in developing data center facilities across the region.
- The entry of several new colocation operators in the market is likely to increase competition among companies. As a result, companies offering better and sustainable solutions are likely to attract more customers and gain a higher market share.
Prominent Data Center Investors
- Actis
- Ascenty (Digital Realty)
- Angola Cables
- AVA Telecom
- Blue NAP Americas
- Cirion Technologies
- Claro
- Digicel
- EdgeConneX
- Elea Data Centers
- EVEO
- Equinix
- Gtd
- HostDime
- IPXON Networks
- InterNexa
- KIO Networks
- Mexico Telecom Partners
- Millicom (Tigo Panamá)
- Oxygen
- OneX
- ODATA (Aligned Data Centers)
- Scala Data Centers
- SONDA
- Telecom Italia Sparkle
- V.tal
- Win Empresas
New Entrants
- Ada Infrastructure
- CloudHQ
- DHAmericas
- Layer 9 Data Centers
- Surfix Data Center
KEY QUESTIONS ANSWERED
1. How big is the Latin America data center colocation market?2. What are the key trends in the Latin America data center colocation market?
3. What is the estimated market size in terms of area in the Latin America data center colocation market by 2029?
4. How many MW of power capacity is expected to reach the Latin America data center colocation market by 2029?
5. What is the growth rate of the Latin America data center colocation market?
Table of Contents
1. Report Coverage
4. Premium Insights
5. Introduction
6. Market Opportunities & Trends
7. Market Growth Enablers
8. Market Restraints
9. Market Landscape
10. Colocation Type
11. Infrastructure
12. Electrical Infrastructure
13. Mechanical Infrastructure
14. Cooling Systems
15. Cooling Techniques
16. General Construction
17. Tier Standard
18. Geography
19. Brazil
20. Chile
21. Colombia
22. Mexico
23. Rest of Latin America
24. Competitive Landscape
25. Prominent Data Center Investors
26. New Entrants
27. Quantitative Summary
28. Appendix
List of Exhibits
List of Tables
Companies Mentioned
- Actis
- Ascenty (Digital Realty)
- Angola Cables
- AVA Telecom
- Blue NAP Americas
- Cirion Technologies
- Claro
- Digicel
- EdgeConneX
- Elea Data Centers
- EVEO
- Equinix
- Gtd
- HostDime
- IPXON Networks
- InterNexa
- KIO Networks
- Mexico Telecom Partners
- Millicom (Tigo Panamá)
- Oxygen
- OneX
- ODATA (Aligned Data Centers)
- Scala Data Centers
- SONDA
- Telecom Italia Sparkle
- V.tal
- Win Empresas
- Ada Infrastructure
- CloudHQ
- DHAmericas
- Layer 9 Data Centers
- Surfix Data Center
Methodology
Our research comprises a mix of primary and secondary research. The secondary research sources that are typically referred to include, but are not limited to, company websites, annual reports, financial reports, company pipeline charts, broker reports, investor presentations and SEC filings, journals and conferences, internal proprietary databases, news articles, press releases, and webcasts specific to the companies operating in any given market.
Primary research involves email interactions with the industry participants across major geographies. The participants who typically take part in such a process include, but are not limited to, CEOs, VPs, business development managers, market intelligence managers, and national sales managers. We primarily rely on internal research work and internal databases that we have populated over the years. We cross-verify our secondary research findings with the primary respondents participating in the study.
LOADING...
Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 326 |
| Published | November 2024 |
| Forecast Period | 2023 - 2029 |
| Estimated Market Value ( USD | $ 1.12 Billion |
| Forecasted Market Value ( USD | $ 1.81 Billion |
| Compound Annual Growth Rate | 8.3% |
| Regions Covered | Latin America |
| No. of Companies Mentioned | 32 |
