By Fleur Doidge
The global colocation market is booming, fuelled in no small part by increased demand for cloud and internet-based services from enterprises and consumers.
The onset of the COVID-19 coronavirus pandemic has only served to fuel demand further, while heaping additional pressure on enterprises to digitally transform their operations and move to the cloud.
The hyperscale cloud and internet giants are increasingly looking to colocation providers in various regions of the world for access to build-to-suit or readily available datacentre capacity that they can acquire to rapidly expand their presence – or even make their debut – in certain geographical regions to meet this demand.
This is particularly the case in continents such as Africa, where enterprise demand for cloud and colocation services is still in its relative infancy, while parts of its economy are ripe for digitisation and transformation.
A map of global colocation opportunities in a recent analysis by Eco-Business Research perhaps unintentionally gives the impression there is not a lot of datacentre development going on in Africa. Apart from South Africa, the continent looks empty of datacentre development.
Yet although Southeast Asia is certainly a datacentre growth market, Africa may grow faster still.
Ibrahima Ba, lead for network investments in emerging markets business at Facebook, says connectivity is being driven by many initiatives. The 2Africa subsea cable, for example, is set to help push mobile internet penetration of 25-30 percent to 80 percent or higher, with the help of infrastructure partners including China Mobile, Orange, MTN, Vodafone, TelecomEgypt and Facebook Connectivity.
“It’s a new approach to cables, with 37,000km of up to 180Tbps (terabits per second) fibre to 23 countries, securing capacity for the next billion users and growth in applications and usage,” Ba told delegates at Africa Tech Festival 2020.
Indeed, digital transformation plans are multiplying across the continent and within individual African countries, many of which not only have enormous natural resources but huge populations clamouring for advancements. Substantial investment in datacentre infrastructure will be needed.
“The opportunity is there. And this will go to all the countries in the continent,” says Mustapha Louni, MD for the Middle East, Africa and Greater India at Uptime Institute.
Amazon opened its first African cloud datacentre in South Africa in April 2020. Microsoft, Google, Digital Realty, NTT and a number of other major colocation providers and joint ventures have made investments in the continent, often teaming up with Africa-based firms such as Liquid Telecom, Egypt Telecom or MTN.
Louni notes that although South Africa has been leading the charge, diverse investments and activity have been increasing around both west and east African business parks. Datacentre growth and banking investment are expected for the next five to 10 years.
The explosion in IT demand has even more scope because, across Africa, 60 percent to 70 percent of the population is under the age of 35, with connectivity and broadband access still only at around 40 percent penetration overall. Yet Africa as a whole, so far, boasts less than half the datacentre capacity of, for example, the UK – leaving plenty of room for expansion.
Sometimes it makes sense to go to South Africa and set up in Cape Town, but equally, it may prove advantageous to set up in Uganda or Ethiopia, depending on individual strategy, says Louni.
“It is very helpful to get a local partner and research all the local regulations including land and licensing. Do your homework – learn the market, do a visibility study, then identify countries that fit your business objectives,” says Louni. “Identify local partners where you can, and also get to know all their processes.”
Sub-Saharan Africa on its own is the world’s fastest-growing mobile market, according to mobile operator analysis from GSMA Intelligence, with half a billion people, or 45 percentof the population, subscribing to mobile services.
Smartphone penetration is rising rapidly. It hit 50% in 2020, leaving plenty of room for growth, especially with more sub-$100 devices and clever financing models, often mobile pay-as-you-go services, reaching the market.
Vodacom and MTN launched the first major 5G networks in Sub-Saharan Africa last year, offering 5G mobile and fixed wireless access (FWA) in South Africa when the government assigned spectrum sooner than expected in response to the Covid-19 coronavirus pandemic, with 4G trials also conducted in Gabon, Kenya, Nigeria and Uganda. Some 30 million mobile 5G connections are forecast by 2025.
Mobile technologies and services in Sub-Saharan Africa should surpass $184bn by 2024, up from $155bn in 2019. Operators are expected to invest $52bn in Sub-Saharan network infrastructure between 2019 and 2025, just as smartphone penetration hits 65% with 678 million connections.
South Africa accounts for nearly half of cellular internet of things (IoT) connections in Sub-Saharan Africa so far, but use cases are emerging across the region and could help address regionwide challenges in key sectors, such as energy, water, agriculture, transportation and logistics, manufacturing and healthcare, the GSMA report confirms.
It all means opportunities for more content, applications and services, which must be supported by an expansion in datacentre infrastructure and services.
Unlike south-east Asian markets such as Singapore, Africa can have fewer geographic constraints – as Morocco’s 1,200-hectare 580MW Noor Ouarzazate Solar Complex north of the Sahara implies. And the Ouarzazate plant is only a subset of Moroccan solar – the country is still behind Kenya and South Africa in solar and wind power supply, according to the International Energy Agency (IEA) figures for African countries.
Additionally, interconnect partnerships still represent a big piece of the potential datacentre and cloud action, providing robust digital foundations for enterprises and carriers alike while also addressing connectivity needs, says Silvio do Marco, Southern African Development Community (SADC) and East Africa managing director of connectivity provider PCCW Global.
“A major opportunity is automated capacity between datacentres and clouds to overcome major connectivity issues,” says Do Marco. “A lot of service providers in Africa are looking to buy tier-one IP transit connectivity in Africa directly from the source.” – Excerpted from Computer Weekly
