Investment in connectivity will not fall despite judicial policy: Neutral Networks

The executive said that Mexico is at a point where users demand greater connectivity capacity for teleworking, such as entertainment from streaming platforms. Meanwhile, industries require greater network capacity to cope with new technological developments, such as Artificial Intelligence, cloud computing and Industry 4.0, which seeks to automate manufacturing processes, so it is difficult to “stop investing to strengthen telecommunications infrastructure.”

Statista shows, based on data from 2022, that the injection of private capital into telecommunications infrastructure in Mexico almost reached 107 billion pesos, which represented an increase of 67% compared to 2013. That figure is also expected to have increased at the end of last year.

Statistical information from the Federal Telecommunications Institute (IFT) indicates that by the end of 2023, around 9.21 million households in the country had access to the Internet through fiber optics, which represents almost 30% of the total number of homes, when 10 years ago there were 546,873 connections with this type of technology.

“In this industry we are not seeing a slowdown in investment due to the need for connectivity. It has been maintained because when you make a business plan you are not looking at the short-term impact, but rather at what it will generate in the long term. These types of investments transcend six-year periods, years and even reforms,” said the executive in an interview with Expansión.

There is confidence to invest

Navarro said that the company maintains its confidence in the country. Proof of this is the alliance it recently achieved with SummitIG, a US company that provides connectivity infrastructure for Data Centers, to formalize a new entity called SierraIG, with which they seek to provide dark fiber for Data Centers in the country with an investment of 50 million dollars.

“American companies like SummitIG see enormous potential in Mexico to become a hub for data center development. Despite political issues, the decision was made to form this alliance,” explained the director of Neutral Networks.

SierraIG, the new joint venture, will use Neutral Networks’ current 750 kilometers of fiber to meet the demand of Data Centers, but the goal is to add 750 kilometers of dark fiber in Querétaro and part of Bajío in the next five years.

Data centers have become the backbone of everything generated on the Internet, as they are the space where all user and company information is stored. The value of this industry is estimated to reach 1.2 billion dollars this year.

There are around 51 Data Centers operating in the country, but by 2029 another 73 are expected to arrive, requiring an investment of 9.192 billion dollars, according to estimates by the Mexican Association of Data Centers. But for a Data Center to become a site, a vast telecommunications infrastructure is required, such as dark fiber.

Neutral Networks’ own calculations estimate that the country requires up to 10 times the infrastructure that its Data Centers currently have.

“These types of constructions are becoming more relevant because they affect not only individual companies but also an entire ecosystem. That is why we maintain a good outlook for growth and investment in dark fiber in the coming years,” said the CEO of Neutral Networks.