Angola Cables diversifies services to face more competitive market

It can be said that Angola Cables anchored in Brazil definitively in 2018, when the first submarine cable connecting Brazil and Africa, the SACS, was activated, and since then the company has become an important player in the capacity and data center. But at that time, all estimates of return on investment were made considering a price per Mbps of US$ 4. Today, the reality is different, and with the fierce competition, capacity companies face a base price of US$ 0, 20 per Mbps. “Our answer is business diversification, with new added services”, says the company's president, Ângelo Gama, who took over the operator last year, in an interview with this news program.

He explains that the company currently has a research office dedicated to the development of specific solutions, such as the IP Gamer product, a product conceived in Brazil but now offered globally by Angola Cables in which capacity and servers were optimized to meet the needs of the games. Another focus of the company is the development of CDNs (servers dedicated to media services) and the attraction of global partners to its network, such as Microsoft, Facebook and Netflix . “There are 30 points of presence and 20 data centers through which we created this global network”. Angola Cables em que a capacidade e os servidores foram otimizados para atender ao mercado de games. Outro foco da empresa é o desenvolvimento de CDNs (servidores dedicados a serviços de mídia) e a atração de parceiros globais para a sua rede, como Microsoft, Facebook e Netflix. “São 30 pontos de presença e 20 data centers por onde criamos essa rede global”.

Brasil was an important bet for the company and today it already represents the main market outside Africa, but as Ângelo Gama says, “it was an important bet, but today we have been much more cautious because the scenario is different. The margins of success are smaller and that is why it is necessary to be more conservative”. According to the executive, the time is now to close global partnerships, in which margins may be lower, but scale is gained. Even so, he says, the time has come for some investments to expand cable capacity in Brazil. “The Covid crisis has doubled our traffic, we went from 1 Tbps and our capacity in Monet will have to go through an upgrade”, he says. Monet is a submarine cable that connects Brazil to the USA and in which Angola Cables has some fibers. Angola Cables têm algumas fibras.

Gama believes that this traffic growth, largely driven by the expansion of the broadband market in Brazil, tends to grow even more with the 5G market, even though Brazil has a characteristic of endogenous traffic, that is, 70% of the content consumed on the Brazilian Internet is in the country itself.

Transformation in Africa
At the same time, Angola Cables , which according to Gama is undergoing a significant transformation process. “Today, the highest growth rates for fixed and mobile broadband services in the world are in African countries, and this has caught the attention of global content providers,” he says. According to the CEO of Angola Cables , companies such as Netflix and Facebook are increasingly looking to the African continent in their growth strategies, which increases the demand for capacity in submarine networks and datacenters, and as has happened around the world, some markets are developing rapidly in terms of access. Angola Cables, empresas como Netflix e Facebook estão buscando cada vez mais o continente africano em suas estratégias de crescimento, o que aumenta a demanda por capacidade nas redes submarinas e datacenters, e assim como aconteceu em todo o mundo, alguns mercados estão se desenvolvendo rapidamente em termos de acesso.

He exemplifies with his own country, Angola. “We have about 120 companies licensed for Internet services, 12 of which are operating as ISPs,” he says. With 33 million inhabitants, Angola is a fraction of the Brazilian market, but Gama believes that the experience of the models practiced by ISPs in Brazil can be replicated there.

The Angola Cables developed the AcceleraNET program in partnership with the government. The program is dedicated to the development of Internet access providers across the country. In the program's model, the investments and costs linked to the contracting of capacity to interconnect the provider become a percentage of the revenue per user and, thus, end up diluted over time and paid as the company grows. “The ISP doesn't need to make such a high initial investment and we have a share in the revenues of these new companies”.