In The Press

Seaborn Networks’ new NY-São Paulo cable to provide connectivity with Telx in NYC


Analyst: Michael Levy Jeff Paschke 22 Apr, 2013

Seaborn Networks, a new undersea cable builder and operator formed by industry veterans, is building an undersea cable network between New York and São Paulo that is due to go live in Q1 2015. The project, Sebras-1, is well funded and Seaborn is currently in the process of seeking export credit agency debt. Natixis, the French corporate and investment bank, is the project’s largest funder. The initiative will require over $400m to complete.

Seaborn has already deployed vessels from New York and São Paulo to conduct a full site survey, which is well underway. The cable will be a 42TB four-fiber pair system with an engineered latency of 104ms. Three of the four fiber pairs will serve as the first ever-nonstop routes between São Paulo and the US, which is now possible with updated transport technology. The fourth fiber pair will stop in Fortaleza, a historic intermediate point for cables, before running to São Paulo. Seaborn has chosen to do this because expectations for traffic growth in that region are promising, with the continued economic growth and the upcoming summer 2014 FIFA World Cup and the 2016 Summer Olympics in Brazil.

This will likely not be the only project we’ll see from the newly formed undersea cable provider. Future projects will be funded independently from each other; therefore, Seaborn is devoting its entire attention to this first cable for the time being. The company had assessed all possible opportunities and chose this route since it exhibited the most pent-up demand. Even though Seaborn is US based, the company was not adverse whatsoever to building a network that never touched its home nation.

The Telx connection
Upon completion, the Sebras-1 gateways will operate out of Telx’s upcoming NJR3 facility in Clifton, New Jersey, in addition to its datacenters at 60 Hudson and 111 8th Avenue in New York. Tenants colocated in each of these facilities will have the opportunity to interconnect directly with Seaborn Networks, and hence Sebras-1, though the Telx Marketplace. Telx and Seaborn jointly expect carriers, content and financial service providers all to show healthy interest in this service. Seaborn chose Telx as its New York colocation partner, since it found access to Telx’s tenant base, serving as potential customers, highly attractive.

It is important to note, that in São Paulo, Seaborn networks has chosen Equinix as its colocation partner, leveraging its SP2 facility in São Paulo.

Seaborn expects carriers and heavy content providers to be its most significant customers. The company has disclosed that Tata Communications is its anchor tenant. Seaborn will deploy points of presence in datacenters besides Telx’s facilities. So far, the company has agreed to connect to CoreSite at 32 Avenue of the Americas and its upcoming Secaucus, New Jersey build.

The Brazilian and São Paulo markets
As an emerging datacenter market, Brazil has few carrier-neutral datacenter providers and the country does not yet have any wholesale datacenter providers. Enterprises in Brazil have fewer MTDC options than in more mature MTDC markets around the world, evenin the largest city of São Paulo. Wholesale datacenters are popular in top metro markets around the world and there is unserved demand in Brazil. In Brazil, including in the top cities of São Paulo and Rio de Janeiro, over 80% of new datacenter builds are for enterprises and governments. This compares with over 50% of new datacenter builds in other more mature top MTDC markets being for third-party datacenter providers.

Over 65% of MTDC facilities in Brazil are within a 75-mile radius of its two largest cities, São Paulo and Rio de Janeiro. Brazil, however, is a large country with 22 metropolitan areas with a population of over one million. However, nine of the 22 largest metros in Brazil have no MTDC facilities and some metros look to be underserved, with only one or two datacenters.

São Paulo is the largest city in Brazil and is among the 10 largest metropolitan areas in the world in terms of population. The city is home to the São Paulo Stock Exchange, the Futures Markets and the Cereal Market Stock Exchanges and the city is considered the financial capital of Brazil. São Paulo is Brazil’s highest GDP city and the eleventh largest in the world, based on purchasing power parity of the city metropolitan area. Therefore, it is not surprising that São Paulo has the largest MTDC footprint out of all the cities in Brazil. We identified 23 datacenter providers in metro São Paulo, including nearby cities within a 75-mile radius, operating 27 facilities in our recently published Brazil MTDC Market Assessment – Supply and Providers report. UOLDIVEO has the highest market share in terms of operational square footage within its four facilities.

Datacenter demand in São Paulo comes from many sectors, including the numerous financial institutions in the city as well as the many multinationals with a presence in the city. São Paulo is also the headquarters location for many of the largest companies in Brazil. With all the potential datacenter demand in the city, the city looks to be an underserved market with a much smaller MTDC footprint than cities around the world with smaller GDPs.


Posted on 22nd April 2013