Market Trends of Chile Data Center Rack Industry
IT & Telecommunication Holds the Major Share
- Chile has the most modern and mature telecommunications infrastructure in South America. The government has made large expenditures on mobile and fiber-optic networks, which now span the whole nation. The government has taken actions to promote the creation of innovative services and technology, including 5G networks and Wi-Fi hotspots. With 26.32 million cellular mobile connections, Chile has the highest regional mobile connection penetration rate.
- The market is currently dominated by 3G and 4G connections, although Chile established the first 5G network in the region in December 2021 after investing USD 3.5 billion. The introduction of 5G networks is expected to boost the country's digital economy and raise demand for high-bandwidth networking equipment.
- The expansion of network connectivity is anticipated as a result of initiatives implemented by governmental bodies. For instance, the Government of Chile claims that approximately 9,000 new 5G base stations will be installed, of which more than 30% will be placed in Santiago and the remaining 9,000 in other regions. All of the nation's public hospitals will also be included in the 5G network's coverage.
- Telecom providers are forming partnerships, getting licensing agreements, and expanding fiber-based network infrastructure to increase broadband connectivity. In March 2022, Mundo, a Chilean fiber-optic internet provider, planned to develop its fiber network in the country with an investment of USD 200 million. The company was to invest this capital in adding 6,000 kilometers of fiber optics to its already existing 7,000 kilometers of fiber.
- In May 2022, the government announced the Zero Digital Gap Plan 2022-2025, aimed at providing network connectivity to all inhabitants of the country. Such instances indicate major data traffic leading to demand for data centers, which are expected to directly lead to more demand for racks.
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Full Rack is Expected to Grow Significantly
- In Chile, the increase in the number of data centers and the preference for retail and wholesale data centers, along with newer hyperscale facility construction, is expected to increase the demand for full racks. Digitalization in various end-user sectors is increasing the demand for facilities, leading to market demands.
- There are now more mobile banking services in Chile than a few years ago. Chile as a base for their operations for neobanking. A few of the fintech launched in Latin America are Tribal Credit, Jeeves, Clara, and Instacash Preauth. The nation has adopted a fintech law.
- Chile is one of the markets in South America to experience the highest levels of cloud activity. The government's growing investments support the development of various technologies, including 5G, AI, IoT, machine learning, and Big Data. The expansion of the Chilean ICT market is also anticipated to be fueled by the rise of digital transformation. For instance, the cloud service provider, Google Cloud Platform (GCP), revealed incremental information about its cloud regions in Santiago (Chile).
- Further, the government offered an investment of USD 9.1 million to create a digital center that comprises 5G development, local fiber optics development, and international optical fiber interconnections. Moreover, InvestChile has 62 projects in its portfolio related to international services. Together, they represent a potential investment of USD 1,924 million, of which USD 1,743 million corresponds to data centers. Due to these factors, government officials will use more data, thus increasing the demand for full racks with increasing data center facilities in Chile.
