The Next Frontier
As the age of the cloud dawns in Africa, the continent is becoming the next frontier for global, regional and local operators. With data centre capacity set to bring investments in excess of US$3 billion to 2025, Melanie Mingas crunches the numbers from the top markets.
Boasting the cheapest power outside of North America, South Africa is home to roughly half of Africa’s data centre capacity – and a growing number of major operators and hyperscalers. Microsoft Corp., Huawei Technologies Co. and Amazon have all recently built data centres in Cape Town or Johannesburg and, earlier this year, Teraco Data Environments, which owns Africa’s largest data centre, announced the expansion of its Johannesburg facility and the construction of a new centre in Cape Town. It is capacity that will be well needed if Xalam Analytics is correct in predicting that demand in the country is growing three times faster than supply. Mobile penetration reached 44% across Sub-Saharan Africa in 2018, which in turn saw the demand for data – for both personal and business use – reach all-time highs.
Driven by this and 5G, the trend is now influencing business strategy in the telecoms space. For example, in August, Liquid Telecom rebranded its South African operations to Liquid Intelligent Technologies in what it called a “strategic repositioning”.
Meanwhile, its subsidiary Africa Data Centres, in May acquired a Tier IV facility in Johannesburg that is widely recognised as the most prestigious and highly specified data centre anywhere in Africa. It was previously owned by Standard Bank, Africa’s largest bank. CEO Stephane Duproz, says: “Data centres are at the heart of economic growth in Africa and, without them, developing rich and self-sufficient ICT ecosystems cannot happen. These facilities are the lifeblood of every business and the foundation of the internet itself, with thousands of networks and connections meeting there.”
Supporting the wider ecosystem Africa Data Centres has joined NVIDIA’s DGX-Ready Data Center initiative. This allows companies across a wide range of vertical markets to adopt NVIDIA DGX systems for AI and data analytics, and in this instance will be hosted locally at Africa Data Centres, along with a range of other managed hosting and colocation services that support business-critical data, applications and back-end systems.
Morocco was one of the top African markets for data centre investments in 2019, and the year started with news that the country’s third largest telco provider, Inwi, had opened its fourth data centre, located at Rabat Technopolis park. It offers 1,000 square meters of space, with the potential to double the size of the facility in future. The addition boosted Inwi’s data centre real estate under management to 4,000 square meters, making it the country’s largest domestic data centre operator. CEO Nadia Fassi-Fehri, said at the time of the opening: “This is a crucial point. Moroccan companies, small or large, need to rely on infrastructures and solutions that ensure the best data security. Building a sovereign cloud allows our country to improve the competitiveness and attractiveness of its economy.”
Other players in the country include Etix Everywhere, HosToWeb and MTDS. In 2017, MTDS launched Morocco’s first internet exchange point in its data centre, allowing its internet and hosting customers to connect directly and locally to the country’s three licensed telecommunications networks. Previously, when the three networks were not interconnected, national traffic between them passed through Europe. However, perhaps the most significant develop of late was the World Bank’s US$500 million loan to support Morocco’s digital inclusion reforms and start-up community. Approved in June, it was part of the World Bank’s Covid-19 support plan, given the rapid growth in demand for digital services in the first half of the year. Senior economist and co-task team leader, Dalia Al Kadi, said the program would allow Moroccan start-ups to “import digital services that are not available in Morocco,” thus improving the country’s competitiveness.
Supported by a raft of new legislation, Egypt’s previously overlooked data centre market is preparing for a growth spurt. The country’s new data protection law was passed in August, paving the way for domestic and foreign players to announce construction projects. When the law was passed, Egypt’s minister of communications and IT, Amr Talaat, said the data centre industry is one of the most promising for Egypt’s economic growth and that it will attract international investments. This predicted growth will be further supported by Egypt’s subsea infrastructure; in fact, once complete the 2Africa cable will leave the continent for Europe via Egypt. Ensuring the workforce of the future has the necessary skills in place to thrive in the new digital economy, Egypt has rolled out a tech training initiative that will give 10,000 young people a free tech scholarship. Announcing the initiative in June,
Hala El-Gohary, who was then interim CEO of the IT Industry Development Agency, said: “With the strong momentum towards going all-digital, we are offering our youth a unique virtual academy with free nano-degree programmes.”
Nigeria’s data centre market is one driven by the near explosive rate of broadband penetration, as well as the modernisation of the business environment. Since 2017, overall capacity across the country has doubled, thanks to the presence of key players – and two in particular are keen to make a splash. Africa Data Centres earlier this year announced it had secured land in Nigeria to build “the largest data centre” in the country and domestic operator Rack Centre is also planning a mega-facility following the cash boost it received when UK-based investor Actis, took a controlling stake in the company. Its plans are to double its 750kW capacity across west Africa and create “one of the largest data centres on the continent”. While the two battle for the crown, Actis is busy making further plans, and has committed to invest US$250 million in new facilities across the continent to 2023. Director Kabir Chal told the Financial Times earlier this year: “If you look at the trends around data, data consumption, cloud migration globally — those trends have played out in many markets and have led to significant growth of the data centre sector. Africa is no different: you see digitisation, the inexorable migration to cloud, and really the advent of big data but, as a consequence, the supply of data hasn’t kept up.” Rack Centre’s current facility features a connection to over 35 of the major carriers and Internet Service Providers (ISPs) in Nigeria, Tier 1 networks, pan-Africa international carriers, and direct connection to all five undersea cables serving the South Atlantic Coast of Africa.