Strong progression of fiber homes passed in Latin America, but low level of actual connections

Optical Fiber is already widely deployed across Latin America. Dataxis analyzes that in 2023 fiber covers 231 million homes in the region, representing a penetration of 139%. Due to overlapping layouts in major urban centers, there was more fiber than homes and much of these connections will not be occupied. Excluding overlaps, 76.5% of households are covered by that optical footprint, representing a significant increase since 2019. The industry had invested around $41.9 billion, between network deployment and customer connection to the lines. Dataxis estimates that by 2028, 87% of homes will be wired with fiber, which would require an additional $30 billion investment. Fiber has emerged as the primary broadband network in Latin America since 2021, surpassing HFC networks, originally driven by cable operators. There is a progressive substitution of those original networks due to the delays and higher costs of DOCSIS 4.0, and the technological evolution of the historical HFC lines. In 2023, fiber coverage was 4 times larger than that of HFC networks, with nuances depending on the country. Claro Brazil and Mexico's Megacable are the two main cable operators that have deployed most fiber, reaching respectively 11.1 million and 10.36 million homes passed. Network idleness led to rethinking strategies and opportunities There is a large installed fiber capacity and a lot of idle capacity due to the overlapping networks in major cities. By 2023 only 31% of the large skein of deployed fiber had been occupied. If duplicate footprints are eliminated, 56.3% of the homes within the optical footprint were subscribed to a provider. In other words, there will be a lot of unoccupied resources. Some operators already launched measures to adjust their exposure to idleness. In 2023, some companies slowed down or stopped the deployment of new networks to focus only on connecting users: Totalplay from Mexico and Alares, Alloha Fibra, and Desktop from Brazil. There was also a process of consolidation of players to complement footprints, such as, for example, the merger between Vero Internet and Americanet of Brazil. Others sold their fiber units to be focused on clients, like Entel Chile, or are evaluating it, like Desktop Brazil. One destination for this idle bandwidth would be to support the emerging 5G networks. The new technology is not seen only as a development of the mobile universe, but rather as an ecosystem that will need strong terrestrial support to interconnect a greater number of towers and cells and a higher volume of traffic. Some operators have spun off their wholesale fiber optic units and partnered with investment funds to be able to afford the expense of deploying to meet that demand. Telefónica made this move with its subsidiaries in Brazil (with the CDPQ fund),...