InvestChile Blog

FDI news | Policies & Tools | Business data analysis | Investment location trends

Road map of the new transoceanic cable that will reach Chile

InvestChile - August,6,2018

The project, with a length that could be between 22,000 and 24,000 kilometers, would link Shanghai, Tokyo and Sydney and could transform Chile into the Southern Cone’s main digital hub.

fiber-optics COS background page2

As from January of this year, the government has had its foot on the accelerator of a project that seeks to connect Asia-Pacific with the American continent through a new high-speed submarine fiber optic cable that, like other existing cables, would pass through Chile. 

Some details of this megaproject’s possible routes are already known and experts anticipate that it could position Chile as the Southern Cone’s main digital hub. “The value and analysis of information are increasingly important. Connectivity and fiber optic cables, therefore, play a strategic role in countries’ development. This puts all Chile’s activities and its industry in a much more competitive position globally,” says Eduardo Vera, Director of International Relations at the University of Chile and a researcher at the Center for Mathematical Modeling.

The first option is a route of 24,000 kilometers from Tokyo to Chile, which would imply an investment of US$600 million. The other one via Shanghai (which is becoming more likely) has a length of close to 22,800 kilometers and would cost US$500 million (see map). The advantage of this second option is that Shanghai is China’s most populous city, with over 23 million people in its metropolitan area.

The alternative of China would also favor digital communications with Argentina, Brazil, Peru and other countries in the region, with Chile serving as a kind of connectivity bridge. It would, in addition, resolve an historical telecommunications problem: connectivity for Easter Island and the Juan Fernández Archipelago.

“There may, eventually, be room for two submarine cables. If you look, there are a lot of those between the United States and Europe, the same with Asia; in the Southern Hemisphere, there are very few. It will depend on who is behind those projects,” says Vera.

The initiative could also be configured as a powerful backup and resilience network for the connectivity cables installed in the North Pacific against the event of their damage by natural disasters or other causes. 

At the same time, it would represent an historic leap forward in terms of the capacity of Chile’s telecommunications infrastructure since, at present, only 6% of South America’s digital connectivity comes from Chile.

Allies

The government is seeking allies for the project’s implementation in the region. Talks have already begun with Argentina and Brazil, which have shown interest in being part of the initiative. The government’s idea is to implement the project through a public-private alliance that incorporates the participating countries under the consortium model or, in other words, one in which they can invest jointly. 

Today, Chile’s Undersecretariat for Telecommunications (SUBTEL) is at the analysis stage and is talking with the Development Bank of Latin America (CAF) and the Inter-American Development Bank (IDB) about carrying out economic feasibility studies and estimates of demand as well as a study of the costs associated with its construction. 

Chile has, in addition, made a commitment to the OECD to be among the three countries with the lowest energy prices, which would facilitate the development of projects related to digital technologies. 

However, Raúl Ciudad, President of the Chilean Association of Information Technology Companies (ACTI), believes that even more infrastructure is required. “Another US$25,000 million in investment is needed over the next ten years in order to reach coverage and access to fiber and communications networks nationwide,” says Ciudad. “This would allow us to reach 95% or 100% coverage, which would bring us closer to OECD standards,” he adds.

For further information about Chile as a digital connectivity hub in Latin America, see this article.

Source: Pulso

New call-to-action

InvestChile

InvestChile

We are the government agency responsible for promoting Chile in the global market as a destination for foreign direct investment, serving as a bridge between the interests of overseas investors and the business opportunities the country offers and providing world-class services that are in line with the country’s economic development policies.

Previous Post

Chile seeks innovation for the food industry in Chicago

Next Post

Economy Ministry and InvestChile to attract 100 overseas companies to Investment Forum

NEWSLETTER

Subscribe to our newsletter

Receive in your e-mail publications and news about how to guide your investment project in Chile

Subscribe to Email Updates

100% Privacy. No Spam.

Related Posts

Visas and foreign citizens

We invite you to obtain a complete guide of residence laws and regulations for investors and foreign workers in Chile.
Learn More