04 November 2024

Africa’s hunger for new data centres is well established; but what does the influx of new facilities, players and capacity mean for the continent’s MNOs?

It’s a simple, inarguable statement of truth: “Africa most definitely needs more data centres,” asserts Wojtek Piorko, managing director, Africa at Vertiv. “If you apply simple mathematics to the question, the answer is clear: we have around 300MW of whitespace in Africa, similar to that of Italy, but for an entire continent. Comparatively, while Africa’s population is around 1.4 billion, Italy’s is just 60 million. In addition, Africa has a young, data-hungry population – with more than 60% below 25 years old. The continent is also going through a wave of digitalisation, with dynamic investments from abroad and a lot of government-drive local ones.”

The entire continent is home to unprecedented digital transformation as mobile networks advance in both coverage and sophistication; internet user numbers continue to climb; and data consumption skyrockets.

“Africa has a growing demand for stronger networks and secured internet storage, especially with the rise of e-commerce, tech startups, e-banking, and e-governance essential services,” opines Nsikak Ekere, communication associate, Bridgia. “However, the few data centres cannot efficiently withstand the high energy usage. In a report by Dai Magister, Africa had about 645 million online users in 2023. Seeing the surge in the volume of data, more construction of data centres that are fast and can sustainably connect users with the green economic future of the continent is imperative.”

Data centres have a key role to play in supporting this transformation and growth, from improving connectivity and latency; supporting emerging technologies like AI, cloud, 5G, IoT, etc.; enabling data sovereignty; supporting local content and applications, which in turn helps boost job creation and the local economy; creating resilient digital infrastructure with built-in redundancy; and bridging the digital divide to enable broader inclusion to essential services.

However, “for 2024–2025, data centres need increased funding from investors in building, maintaining, and upgrading new data centres to efficiently deliver services to Africa’s over 1.4 billion population,” shares Ekere. “And to effectively leverage the advantages of the AI era and the estimated $7 billion market Dai Margin projection in revenue by 2028, South Africa, Egypt, Nigeria, Kenya, Côte d’Ivoire, Morocco, and Senegal must incorporate powerful cloud and computer edge systems embedded in their data centres to withstand the traffic of data generated, stored, and transmitted.”

The impact on MNOs

Expanding data centre capacity has a significant positive impact on the continent’s mobile network operators (MNOs), offering improved network performance, cost efficiency, scalability, enhanced customer experience, compliance with regulatory requirements, new revenue opportunities, and a competitive edge in the market.

For the mobile network, more local data centre capacity means reduced latency for data serves, granting faster and more responsive mobile internet experiences for users. Local data centres also provide redundancy and backup solutions, ensuring more reliable network operations and reducing downtime. Moreover, hosting data and applications locally can reduce the costs associated with data transfer and storage compared to relying on international data centres; and, as data centres scale up, MNOs can benefit from shared infrastructure, reducing their capital expenditure and operational costs. With more local data centres, operators can scale their operations more efficiently to meet increasing demand, as well as deploy new services and applications, responding more effectively to market needs.

“Expanding the capacity of data centres in Africa through enterprise cloud-based data will help MNOs store volumes of data in African data centres, thereby retaining financial value for Africa’s economic ecosystem,” agrees Ekere. “The impact will localise data centres in Africa closer to MNOs to enable effective performance and reduce costs. To achieve this, Africa will need a stable power supply and a good cooling system to test-run and create new data centres.”
The rollout of 5G remains in its infancy across the continent with a little over 5% of the populace covered by the latest generation of mobile technologies. Data centres are an essential component of 5G networks, providing the necessary computational power and low-latency infrastructure. As such, the expansion of local data centre facilities promises not only to support the rollout of 5G, but with it, a better customer experience with improved performance; and the opportunity to launch new digital services like mobile banking, streaming, e-commerce, etc., enhancing competitiveness for MNOs amidst a landscape of stalling core service revenues.

Piorko highlights that while traditionally MNOs have driven data centre capacity, with global colocation players entering Africa, the MNOs must up their game: “MNOs must decide whether they want to be part of the data centre market, and if so, in order to be competitive, they need to consider either upgrades of existing outdated infrastructure or new investments. Some have already decided to invest, even establishing separate companies to achieve this.”

The build or buy debate rages on - with ownership comes full control of the data infrastructure; tighter integration with existing infrastructure; and the option to deploy proprietary technologies without restriction. However, the high costs, slower build-out times and the need for skilled personnel to manage the facility can be off putting. Outsourcing, on the other hand, is more cost efficient, scalable, and flexible, and allows the operator to focus on its core business while still gaining access to the latest technologies – at the cost of loss of control, security and sovereignty.

“Many MNOs find it expensive to operate their own data centres because of infrastructure, power, and ethical data privacy laws in collection, transmission, and storage, particularly in countries like Nigeria,” says Ekere. “But, the procedure also allows MNOs to operate their own data centres at different levels of user data protection for a given time frame, ensuring they are categorised under a tier: collection, transmission, or storage. It also provides a market for carrier-neutral data centres to independently offer connectivity to telcos and other users through its outsourcing services to hard-to-reach areas.”

Data sovereignty

As of December 2023, 36 out of the 54 African nations have data protection laws and/or regulations. 16 countries have signed the African Union Convention on Cyber Security and Personal Data Protection adopted on 27 June 2014 (the Malabo Convention) and 13 have ratified it.

“Sovereignty is becoming increasingly important to Africa’s data flow. Data privacy laws have been implemented in around 65% of African countries thus far, with draft laws under consideration for three more, and the hope is that the rest will certainly follow,” says Piorko. “This will create a lot of growth opportunities for the data centre market.”

In line with other countries across the globe, stringent new laws on data sovereignty stand to offer adopting African nations a boost to their national security. Storing data within national borders helps protect against cyber threats and espionage from foreign entities and allows governments to monitor and regulate data flows more effectively, ensuring that critical data is not misused or accessed by unauthorised parties. Ensuring that data is stored and processed within a country allows for better control over data privacy and protection and means that countries can enforce stricter data protection measures.

“It is important that Africa has data control and security at all times to prevent third-party breaches,” explains Ekere. “Now is the time to have data centres with sustainable regulations and legal policies for every country in Africa.”

Tough new data sovereignty laws come with economic benefits, too. Keeping data local encourages investment in national data infrastructure, such as data centres and related services, boosting the local economy and creating new jobs in the tech sector, including data management, cybersecurity, and IT support.
Looking ahead, as digital economies grow and cyber threats increase, it is likely that more African countries will adopt data sovereignty laws to protect their citizens and national interests. This will be heavily influenced by global trends, pressures and trade agreements, which may push African nations towards adopting stricter data sovereignty laws to align with international partners. However, implementation will take time as the data centre boom is only just taking hold; and some countries may decide that enforcing data localisation could increase costs for businesses.

“There must be collaboration and strategic knowledge sharing to assess, monitor, and visualise the economic and industrial value of data flows throughout the 54 African countries and beyond. This is crucial in mapping the continent’s data flow and cloud security architecture to become independent and sovereign,” adds Ekere.

The future is digital

The future of data in Africa is poised to be dynamic and transformative – with more than a little help from data centres.

We can expect to see a proliferation of local data centres come online to meet the increasing demand for data processing and storage, and potentially hybrid models being increasingly adopted by MNOs, combining own-operated data centres with carrier-neutral facilities to balance control, cost, and scalability. Industry experts believe this expansion will go hand-in-hand with cloud adoption, with MNOs increasingly offering cloud services to both businesses and consumers.

The next five years will likely see more African nations implement stringent data protection and sovereignty laws, requiring MNOs to store and process data locally. As such, MNOs will be investing heavily in compliance frameworks to meet these regulatory requirements, ensuring data security and privacy. Amidst booming data volumes and increasing global cyber threats, these new stringent data regulations will help protect government, business and consumer data.
“Africa will record great successes in the near future because of the upward trends in subscriptions and digitalisation,” shares Ekere. “Operators and relevant stakeholders must strive to scale up data centres using new models and reliable power while underscoring the drastic potential of their subscribers and innovations to drive solutions into the global market. The market value of African data is worth billions, but when compared to America, Asia, and Europe, it lags.”