América Móvil will revolutionize its business in Latin America with a cable no thicker than two fingers. The 17,000-kilometer fiber optic cable-a length nearly half the Earth's circumference-will run from Jacksonville, Florida, in the United States, to Rio de Janeiro in Brazil.
It will be a first for the company owned by Carlos Slim and his family, and will give most Latin American subscribers better bandwidth services, the ability to watch high-definition and 3D videos and play interactive games.
Up to 270 million people in Brazil, Colombia, Guatemala, Mexico, the Dominican Republic, the United States and Puerto Rico will be able to stream YouTube videos up to four times faster, according to global telecommunications consultant Telegeography.
The Pan-American operator will invest about 500 million dollars to install the amx-1 cable more than 6,000 meters below the Atlantic Ocean.
It will spend half of what it invested in all of Mexico in 2012 on a single cable. In fact, it will be the most ambitious telecommunications project in Latin America in a decade, says Telegeography's Tim Stronge.
Slim's company hired France's Alcatel-Lucent to install the submarine fiber optic cable that will connect Brazil, Colombia, the United States, Guatemala, Mexico, Puerto Rico and the Dominican Republic.
The eight-strand fiber optic cable-covered by layers of metal, plastic and Vaseline-will transmit hundreds of millions of movies, documentaries and series every year.
"There is huge growth in the area of integrated video communication services," said América Móvil finance director Carlos García Moreno in March at a conference in Mexico City. "In Latin America, for example, triple play... is growing very quickly."
With the underwater cable, América Móvil hopes to become Latin America's top distributor of audiovisual content via the Internet.
Meanwhile, Slim could face increased competition in mobile and fixed-line telephony markets in Mexico as a result of the telecommunications reform, but the lack of regulation of this kind of infrastructure in the region gives his company access to a technology that he will not be forced to share with competitors.
With nearly 326 million subscribers in 18 countries, América Móvil is already the world's third-largest operator, after China Mobile and Europe's Vodafone.
Unlike large phone companies, however, América Móvil does not have its own underwater fiber optic network. Telefónica, its major regional competitor operating in 12 countries, has had a 25,000-kilometer submarine network for 12 years. Even the Monterrey-based Axtel and Marcatel have minor underwater cable systems.
There are 33 fiber optic cables in the region managed by companies ranging from smaller outfits like The Loret Group, to giants like Level 3 Communications, which operates 60,000 kilometers of submarine networks (enough to circle the Earth more than once).
América Móvil is currently paying third parties for the right to use underwater infrastructure, says Marco Malfavón, Alcatel-Lucent's corporate communications director for Latin America and the Caribbean. But the growing demand for data transmission has forced Slim to install his own network.
América Móvil needs its own submarine infrastructure, and soon. The company is improving its infrastructure to prevent bottlenecks that end up reducing connection speeds or distorting transmission quality, says Anne Bouverot, CEO of gsma, an organization that includes more than 800 operators, including India's Airtel and China Mobile.
Last year, just over 673 petabytes of video were transmitted over the Internet in Latin America, equivalent to about 25 million Blu-ray films. By 2016, this number will grow nearly sixfold to reach 4,000 petabytes, or 154 million Blu-ray films.