Amazon eyes Patagonia data center as Chile expands fiber optic network

SANTIAGO (Reuters) - Chile is looking at expanding its undersea fiber optic network across the Pacific Ocean to China and south to Patagonia, a project that has attracted interest from international companies including Amazon, the government said on Tuesday.

Chile, one of Latin America’s most developed countries, is relatively well connected in telecoms terms, but existing networks will not suffice for the future, telecoms undersecretary Rodrigo Ramirez said to journalists.

The domestic project will connect the settlements of remote Patagonia as far south as Puerto Williams on the tip of Cape Horn, and would be the world’s most southerly such cable, the telecoms ministry said. The contract to build it is to be awarded in September and will be subsidized to the tune of 64 billion Chilean pesos ($96 million).

International companies had expressed an interest in the growth of technology infrastructure in the region, including Inc and Alphabet Inc’s Google, said Ramirez.

Amazon is expanding its cloud business internationally and is keen to build more data centers. In March, the company signed an understanding with Chile to help modernize the country’s government systems.

It has also expressed an interest in placing a data center in Patagonia, ministry technical head Sebastian Beeche told Reuters. Beeche added that President Michelle Bachelet would discuss this with company representatives during a visit to Seattle in the United States on Tuesday where Amazon has its headquarters.

In South America, Amazon has data centers only in Brazil, but is keen to expand into Chile, attracted by its relative economic and political stability and the cooler climate, said Beeche.

The company’s cloud-computing business is the largest in the world and accounts for a majority of its operating profit. Adding more data centers is key so it can handle an influx of new clients looking to host their data and computing in the cloud.

Amazon did not immediately reply to requests for comment.


Chile has also been talking with China about laying fiber optic cable across the Pacific, a technically demanding challenge, said Ramirez.

Such a cable would cost an estimated $550 million to $650 million and stretch for at least 20,000 kilometers (12,427 miles) across the southern Pacific, an area that to date is off the international subsea fiber optic grid.

Three potential routes are being examined, the ministry said. One would run from Chile’s coast via New Zealand and Australia, another further south via just New Zealand, and a third via Tahiti. All could potentially link remote Easter Island, which is governed by Chile.

The timing of construction of the trans-Pacific route and the details of the bidding process have not yet been finalized, but the government said it was hoping to make a decision this year on the route and was in discussions with China, and also with other South American countries that may benefit.

Reporting by Rosalba O’Brien in Santiago, Additional reporting by Jeffrey Dastin in Los Angeles; Editing by David Gregorio