climate and comms

Building data centres in Africa is increasingly starting to grab the industry’s attention.   What are the key issues that are influencing the growth of data centre’s in Africa? The data centre industry continues to thrive globally and the big players are still seeing strong growth in mature markets and hence they have little incentive to start looking at smaller data centre’s in what is still perceived to be a high-risk market.   The players who are getting into Africa are going to be ‘specialists’ who see the niche and want to get a foothold early.   Not that there is going to be a shortage of opportunity as the installed base in Africa is still miniscule. The quality and nature of that installed base is variable with very few Tier 3 let alone Tier 4 data centre’s and many are in-house telco data centre’s.     Carrier neutral colocation data centre’s are few and far between.   There-in lies the opportunity.   There is more than sufficient submarine capacity and the

According to McKinsey shareholder returns on telecom assets are down 60% over the last 4 years in the Middle East Africa (MEA) region. ( http://www.mckinsey.com/industries/telecommunications/our-insights : Telecommunications industry at Cliffs edge).     The main culprit is stagnating growth.   MEA includes mature markets like those in the Middle East where (mobile) penetration levels are close to 150% as well as high growth markets like Ethiopia where penetration is below 50%.    It is thus not useful to undertake analyses on an aggregate basis.   The mature markets are where data revenues are starting to show signs of rapid growth –but the markets are saturated.    In many African markets – particularly in Sub-Saharan Africa [1] – the decline in ARPU (average revenue per user) is no longer offset by subscriber growth and there is soon to be a decline in revenues and profitability. In order to profit from the explosion of data services mobile network operat