Africa’s untapped opportunities

12 April 2021 | Natalie Bannerman

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Data centre veteran Wouter Van Hulten talks to Natalie Bannerman about how Africa is preparing to leapfrog the west in infrastructure developments, and why PAIX is at the heart of it all

The brainchild of former Interxion executive, Wouter van Hulten, PAIX Data Centres was born and has one overall mission: to build and operate world class data centres on the African continent, borrowing from the way they’re built in Europe.

PAIX was launched in the summer of 2016 by Van Hulten and “three co-founders soon joined”. By January 2018, they had completed the acquisition of Rack Africa, a data centre in Ghana founded in 2011 by another Dutch entrepreneur. The company also has facilities in Nairobi, Kenya, and has been focused on designing, building and operating carrier-neutral data centres across Africa.

One mistake newcomers often make when trying to decipher the areas that need to be addressed in the African telco market, is thinking of it in general terms.

“It’s a big continent, so it’s hard to generalise because you know South Africa is so different and so much more advanced than, say, Mali,” explains Van Hulten.

But on the whole, he says when he first arrived on the continent in 2015, “it looked to me like the industry was 15 years behind where Europe was”.

Looking back at the European trajectory 15 years ago, he says that it all started with carrier-neutral data centres accommodating different carriers that that were interconnecting in a liberalised telecoms market.

“After that, data networks were interconnecting and once you have data networks interconnecting then you have the content providers, who come into the market and want to connect to all these different networks and to reach the eyeballs,” he explains.

“This is then followed by the financial institutions, who rely on multiple networks to have greater performance of their infrastructure and lastly you have the enterprises who are probably a little bit more price sensitive who then start outsourcing their data centre requirements and that evolution is now happening in Africa.”

It’s a similar story when it comes to the biggest drivers of data consumption across the continent. “South Africa is way more developed with the likes of Microsoft and Amazon having already deployed the beginnings of hyperscale data centres in that market,” he adds.

But at the most foundational level, Van Hulten says that it starts with internet access, followed by content providers and then cloud access.

“Thereafter, as the end users become more sophisticated, they start accessing more sophisticated services. Services like streaming, content and gaming they all become drivers,” he says.

Though the last year has been difficult for people across the globe, the impact of the pandemic, aside from causing a significant increase in traffic, has only led to the further need for greater interconnection, or at least that’s what Van Hulten has seen over at PAIX.

“It’s been a very strange year, but what we see on the continent is that the traffic growth is tremendous and that’s both local and international traffic,” he says.

“We also see that from the bandwidth upgrades that our customers are requesting, the need for interconnection is key.

Even though there’s a Covid-19 crisis, there are still submarine cable breaks that happen, other issues with networks, and the best way to build resilience into your network is to interconnect with others, and that’s exactly what we enable. Building communities of interest, where businesses can interconnect for mutual benefit.”

According to the World Bank, it will cost around $100 billion to give an additional 1.1 billion people in Africa access to the internet by 2030, meaning that digital transformation across the continent requires huge investment as well as creating great opportunity. But such work is already underway and PAIX is very much part of the conversation.

“PAIX is building the heart of Africa’s digital economy, and one major issue remains that more affordable fibre is needed across the continent. A recent initiative by the IFC – to share fibre that’s already there between carriers – is a great development, but then so much more infrastructure improvement needs to happen,” says Van Hulten.

Once such element of this much-needed fibre is the specific challenges around rural fibre, an issue that more than likely will turn to wireless solutions to solve. Given that PAIX serves all customers in the carrier and internet service provider space, that includes satellite providers as well.

The African continent is huge and that’s one of the biggest challenges. “Clearly in metropolitan areas, fibre is the best solution but in more remote areas, wireless is a great option,” explains Van Hulten.

“So, the satellite operators that are now rolling out their networks, will also take their share of providing services in Africa.”
In keeping with this ecosystem, mobile networks are the primary source of voice and data services in Africa, meaning that tower assets must also hold a prominent position in the infrastructure development roadmap.

“Data centres are just part of the total infrastructure requirements and there’s about two billion people that also would like to get connected and have access to information and services, to do that you need to build all that infrastructure,” Van Hulten says.

“What we’re keen to do is to make sure that the whole industry develops so back in 2018, with Schneider Electric, we took the initiative to found the Africa Data Centres Association in Cote d’Ivoire and the whole idea there is to bring operators together and work on issues that we need to resolve together.”

With 15 members and a further 11 technology partners, the association is a place where operators from across the African operator space can share best practices, resolve common issues and cooperate in a technical working track where the technical teams from the various different companies come together so to learn from each other.

“So across the spectrum, infrastructure is needed and mobile and towers are one part and data centres are another,” he adds.

As the continent continues to build up its infrastructure and digital ecosystem, so too will the prevalence of more local interconnection. A move that in the long term will be beneficial not just for cost reasons but because “you won’t have traffic tromboning via Europe”, says van Wulten.

Speaking of, subsea is also safe from the effects of such local data storage because as he puts it “data just keeps on growing” so at least in some cases tromboning data will continue to be the norm.

Unlike the cooler climate of Nordics and its abundance of renewable energy, Africa, at least in parts, is still in the midst of that green journey. It does, however, have an obvious power opportunity that its Nordic counter parts do not have and that’s the year-long sun and the possibility of solar and geothermal power.

“One of the most amazing opportunities on the African continent is green energy, particularly solar but also wind and geothermal. The unfortunate thing is that you know many of these markets don’t have the regulatory environment yet, which enables independent power purchase agreements,” say van Hulten.

“If that’s possible, that would be transformational. Imagine all the world-class hyperscale data centres in Kenya just running on geothermal power, an unlimited source of power. But that’s the fun of building this industry on the African continent, we get to figure out how to best build it here.”

Speaking of said regulatory environment, the variation between countries is as different as night and day, but there is change happening all the time.

“I think the conversations are ongoing, certainly, but the challenge is how to make that transformation. With the Africa Data Centres Association, we provide a voice for the industry and we actively interact with various governments and institutions and provide our input from a data centre operator perspective and advise on what things need to happen. At some point these things will be possible.”

Everybody is always concerned with the next big thing, and Africa has the potential for many big things to develop. With the likes of Google’s Equiano subsea cable, the Facebook-led 2Africa subsea system, and the various new cloud and data centre facilities being announced no one is quite sure of where the next big international hub will appear – Wouter has a few ideas though.

“We see Nairobi as a great new up and coming hub. We’ve just completed a new world-class data centre in Nairobi and it’s right in the heart of capital’s financial district, with all the country’s major banks nearby and the Kenya Internet Exchange Point installed,” explains Van Hulten.

The other potential hub he sees is Accra in Ghana, another market which PAIX has a presence in. “It’s very exciting and I think that the Ghanaian market benefits from a government that’s experiencing the stability, and the right economic environment has encouraged this digital economy to develop in Accra. PAIX Accra hosts all the network operators in the region, and we’re doing another expansion of our facility in the next 12 months.”

As the conversation turns to emerging technologies, Van Hulten is keen to remind me that though Africa is deep in the development of the latest innovations like 5G and machine learning, we can’t forget the basics like transmission, capacity, fibre, wireless and satellites and while it will continue to leapfrog in certain areas, “the basics still need to be there”.

So as the whole continent continues to mature and interest continues to grow for PAIX “the focus is on building the heart of the digital economy and we do that by building great teams who are passionate and have the courage to work on this transformation,” says Van Hulten.

“With my colleagues, we’ve been building great teams now in Ghana and Kenya and there are more countries on the roadmap. Then when you start building teams that are interacting and building communities. Providing all the tools and skills to make a real contribution - that’s really exciting.”

As Van Hulten reflects on his time in the space, it’s clear he has no plans on slowing down.

“We’re too busy getting a whole new generation ready to take over and run with this business.”