Equinix expands deeper into Latin America, acquires four data centers in Chile

Equinix expands deeper into Latin America, acquires four data centers in Chile

Equinix has announced the expansion of its Platform Exquinix deeper into the Latin American market after the acquisition of four data centers in Chile from Entel, a telecommunication provider. Along with this acquisition, the company has signed an agreement to acquire one more data center in Peru, bringing the enterprise value for five data centers to approximately $735 million.

With the expansion in Latin America, Equinix claims to be “the largest provider of digital infrastructure services in the region.” As Chile is growing to be one of the technological hubs providing opportunities to local enterprises to accelerate the digital transformation. The collaboration between Equinix and Entel will enable enterprise customers to leverage hybrid multi-cloud solutions to develop digital infrastructure.

“We continue to see demand from businesses in Latin America, across all sectors, looking to transform their operations to be digital and cloud-enabled. Equinix’s expansion into Chile and Peru accelerates digital transformation opportunities in this rapidly growing region and is a critical step in our long-term strategy to broaden digital access for our customers globally,” said Tara Risser, President, Americas, Equinix.

Equinix has already operated in Southern America for over a decade with 11 data centers in Brazil, Colombia, and Mexico. The company is optimistic with its expansion plans for future growth in Santiago, allowing it to support immediate and future customer needs.

As part of the acquisition, more than 100 Entel customers operating the four data centers will become Equinix customers, with more than three-quarters representing net new customers. Equinix also plans to introduce Equinix Fabric, Network Edge, Equinix Internet Exchange, Equinix Internet Access, and Metro Connect to the four data centers in Chile.

To contribute to carbon neutrality, which has become one of the critical strategic aspects of data center companies, Chile has access to non-conventional renewable energy while also offseting operating costs.

“Chile’s access to sustainable energy sources such as solar, hydro, and wind helps our customers in the region and multinationals doing business with them to grow responsibly and sustainably, which aligns with our global sustainability strategy,” Risser added.

Analysis

The new Chile and Peru data centers will add to Equinix’s presence in Brazil, Mexico and Colombia, giving it good coverage in the region from both a geographic, connectivity and economic perspective.

There is already demand from multinationals and cloud providers for capacity in Santiago and Equinix received inquiries from existing customers in APAC regarding Santiago on the day of the announcement. Huawei Cloud, for example, is expanding in Latin America aggressively and Tencent cloud just entered the region as well. Equinix also expects Santiago will serve the wider southern cone region while both countries cover the west coast nicely. The Lima data center will give it a toehold in a relatively small market to see how it develops over time.

Entry into other markets in Latin America has not been ruled out but other countries (Argentina or Venezuela, for example) carry a greater risk in terms of economic stability and geopolitics. It is more likely that any expansion would involve new cities in Brazil and Mexico, given their sizes in terms of geography and economy, and this aligns with Equinix’s strategy of entering and building out around major metros.

Phil Shih, Managing Director, Structure Research

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