Chile and CAF to lead feasibility study for first digital gateway between South America and Asia

The Ministry of Transport and Telecommunications (MTT) and CAF—development bank of Latin America— signed today a US$3 million (CLP 2.1 billion) Technical Cooperation Agreement to finance feasibility studies for the Submarine Cable Integration Project: “Asia–South America Digital Gateway”.

The studies will produce the technical, legal, financial and economic definitions necessary for laying a submarine cable between the two continents, which will enable the construction of a digital integration system for the region.

The project aims to digitally connect South America with Asia by laying a submarine fiber optic cable, with a potential distance of approximately 24,000 kilometers (14,900 miles), and its initial design includes at least two pairs of fiber optics, with a transmission capacity based on current standards for this type of systems (10-20 Tbps).

The Minister of Transport and Telecommunications, Gloria Hutt Hesse, stressed that the study “will elucidate the potential scope of the project, which positions our country as a data gateway to the entire region, and a attractive location for the installation of datacenters to be connected to this cable. Thus, we advance in the development of our telecommunications agenda, known as our ‘Digital Matrix,’ while honoring the mandate of President Sebastián Piñera of increasing the nation’s connectivity, both at home and with the rest of the world. We expect to have the first results of this study during the second half of 2019, and during 2020, we want to establish the consortium to be in charge of, and then start manufacturing the cable.”

In addition, CAF executive president Luis Carranza Ugarte said: “Greater connectivity, together with greater network capacity and reliability, will encourage digitization in production processes, improving their efficiency, which is a fundamental factor for Chile’s and Latin America’s sustainable development. Therefore, we are very pleased to promote integration infrastructure projects, especially with Asia, a strategic market for the region.”

Carranza noted that by sponsoring the project, CAF reiterates its commitment to digital regional integration, which CAF has supported by financing large-scale telecommunications infrastructure projects for the deployment of digital fixed and mobile broadband networks, as well as with the financing of studies for the installation of a data exchange center in Panama, among others.

Meanwhile, the Under-Secretary for Telecommunications, Pamela Gidi Masías, noted: “The government has the political and economic will to transform Chile into a relevant digital hub for the region, and that is why we are advancing this initiative for underwater connection to Asia. In addition, we are laying above-ground fiber cables at the various border crossings across the country, and internally, with the National Optical Fiber (FON) and Southern Optical Fiber (FOA) projects, thus doubling current capacity.”

Gidi Masías added that regardless of the results of the feasibility study to be tendered next week, the government will make the necessary efforts so a stretch of the cable passes through Easter Island, in order to improve the digital connectivity of the island, connecting their residents, and allowing them to include digital processes in their productive activities, such as tourism.

After the signature, the MTT — through SUBTEL — will initiate the tendering process for this demand and feasibility study and its subsequent award. This Chile-led initiative has received support from Argentina, Brazil and Ecuador, which, together with other nations in the region, will benefit from significant spillage effects by linking to Asia Pacific at lower costs. 

The first digital highway between South America and Asia will improve network reliability and human capital development, increase competition, enhance the conditions for the installation of data centers, and will meet future demand for services of the fourth industrial revolution and big data, among others.

The terms of the tendering procedure for companies interested in bidding for this study will be available next week.