North Africa analysis: Egypt 'to become gateway to Africa and its data hub'

23 July 2019 | Alan Burkitt-Gray

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Egypt is poised to become the African hub and the gateway to Africa, said the CEO of Telecom Egypt at Capacity North Africa in April. The telecoms industry has long known of the importance of Egypt to the world’s networks, situated on the main fibre route along the Red Sea between Asia and Europe.

But this country, with a population now of over 100 million, has long been a meeting point for Africa, Asia and Europe. Just 200 metres from the venue of the Capacity North Africa conference in Cairo is the world renowned Egyptian Museum, home of artefacts thousands of years old showing how this ancient civilisation has been at the centre of the world around it.

And that’s the role envisaged by Adel Hamed (pictured), who took over the leadership of Telecom Egypt earlier this year. He opened the first ever Capacity North Africa conference in Cairo with a declaration that the company and Egypt itself could be the key hub for Africa. Telecom Egypt’s rival, Fiber Misr, echoed Hamed’s call. Nagui Anis Khalil, vice president of strategy and planning, pointed the delegates southwards from the vital Red Sea-Mediterranean connection that is vital to the world’s networks. (Incidentally, Misr, pronounced “muz-re”, is simply the Arabic name for Egypt.) Khalil said that Egypt “is the second country in the world in terms of submarine cable connections”, but “we need to transform from just transit and build upon these cables.

North Africa needs more internet exchanges and data centres to keep content in Africa.” Khalil called for Alexandria, on Egypt’s Mediterranean coast, to become a data centre hub comparable with Marseille in southern France. The electricity supply “has doubled in Egypt in the last four years”, he said.

“We have a 35% surplus. It is not the cheapest in the world, but it is reliable. We have all the factors for a data centre business.” Guillaume Perdriaud, chief wholesale and international officer at Inwi, the Moroccan operator, agreed about the importance of building infrastructure into Africa. “The very strong story is about unloading the capabilities inland, across Africa. We need to build the future,” he told the conference. Before he took over as CEO of Telecom Egypt in succession to Ahmed El Beheiry, Hamed was the company’s chief international and wholesale officer.

The company is at the heart of the Egyptian government’s ambitions to create a digital Egypt, with its digital transformation initiative, which includes schools and government institutions. Key to this whole process is better connectivity for Egypt and all African countries. Senior executives from the industry spoke about plans to build new cables through Africa. Mohamed Ahmed Mohamed, director of international business at Djibouti Telecom, told the conference that the company will start laying the $86 million DARE1 – Djibouti Africa Regional Express – cable in October 2019, due for service in June 2020. It will have four landing stations along the east coast of Africa, between Djibouti and Kenya, in order to cater for growing international traffic, he said.

Another is the PEACE cable, linking Pakistan with east Africa and Europe. Mohamed Nasr, vice president of cable innovation at PCCW Global, told the conference that the project was “one of the fastest cables I’ve ever worked on”. The PEACE cable project has already announced key partners, including Interxion, which is providing facilities in Marseille, Icolo, which is doing the same in Kenya, and Cybernet, in Pakistan. Danish Lakhani, CEO of Cybernet Pakistan, said the arrival of the system “will have an outsized impact on the digital landscape in Pakistan”. He added: “PEACE is the only cable system that originates in Pakistan and connects three continents – Asia, Africa and Europe.”

The cable “elevates our country’s strategic standing in the global connectivity race”. PEACE is backed by Chinese parent company Hengtong, whose vice president, Wu Qianjun, said: “PEACE is the first privately owned submarine cable system from China. We see the PEACE project as a strategic pivot for the Hengtong group.” The cable will give Hengtong “our experience as a subsea cable investor”, he said, and help the group to identify “new investing opportunities in this market in the future”. In May an announcement to the Shanghai Stock Exchange disclosed that Hengtong is likely to be purchase Huawei Technologies’ 51% stake in Huawei Marine Systems.

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