The content and bandwidth markets in South America have been growing rapidly for some time now, and the region is looming large in the plans for many network operators. Hence, I was not surprised to see Level 3 Communications (NYSE:LVLT, news, filings) make another move southward with today's announced agreement with INTERNEXA. INTERNEXA, besides using more than its quota of capital letters, operates a fiber network 18,000km spanning seven countries with special focus beyond the largest countries of Brazil and Argentina. INTERNEXA is helping Level 3 expand its CDN to Venezuela and Columbia and south along the Andes through Ecuador and Peru.
Level 3 will be caching content locally in the region, speeding up delivery of all sorts of rich content, such as video, online games, software, and music. Meanwhile INTERNEXA gains better international connectivity for its IP network as well as a presence in the CDN marketplace without having to build their own. That said, I can't seem to find much information on INTERNEXA, as their website is rather minimal. Anyone have a network map handy?
The deal does perhaps push a putative merger between Level 3 and Global Crossing further into the background. Both companies have been steadily building content and video businesses that compete more directly with each other. It had seemed a few years ago that the combination of Global Crossing's Latin American assets and Level 3's content and video business fit rather well together for such an expansion, but they have both been finding another route.
|Update: John Rath kindly pointed me toward this Wikipedia map of INTERNEXA's assets.|