Africa Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

Africa Data Center Colocation Market - Industry Outlook & Forecast 2023-2028

The Africa data center colocation market is expected to grow at a CAGR of 10.64% from 2022-2028.

KEY HIGHLIGHTS

• South Africa plays an important role in the Africa data center colocation market, standing out as the primary driver of capacity in the region. With more than 60% of the IT power capacity, South Africa stands out, making it an attractive destination for substantial investments in data center facilities. Nigeria, Kenya, and other African countries follow this. Smart city initiatives, a rise in 5G network connectivity, and fiber connectivity are other factors driving continuous regional data center investments.
• The growing adoption of Artificial Intelligence (AI) is fueling regional data center investments. An example is the strategic partnership between Huawei and ITDIA in Egypt, where they established the "Spark" initiative to promote AI-based investments and initiatives in the country.
• The Africa data center colocation market grows continuously in terms of connectivity by deploying new submarine cables such as Africa-1, 2Africa, India Europe Xpress (IEX), Equiano, and Medusa Submarine Cable System, and SeaMeWe – 6, which are expected to be ready for services during the forecast period.

MARKET TRENDS & DRIVERS

Deployment of 5G Network Services

• The introduction of 5G in Africa will likely generate substantial data, further increasing investment in data centers. High internet connectivity, bandwidth, and less processing time is the feature of 5G technology. South Africa, Nigeria, Kenya, Egypt, and Ethiopia have witnessed the commercial launch of 5G in the region, while countries like Ghana, Algeria, Tanzania, and Congo were in the initial stages of their development.
• Vodacom, MTN, Ericsson, Orange, Ethio Telecom, and Rain are the main telecom operators in Africa involved in the commercial deployment of 5G services that partially or entirely cover 5G services in the country. Several pilot 5G projects are underway and expected to be deployed in the forecasted period.

Procurement of Renewable Energy Sources

• Due to the unavailability of proper power infrastructure in the African region, data centers were forced to develop their renewable energy infrastructure for power generation.

I. MTN, a South Africa-based telecom company, operates four facilities in Kenya and other African countries, uses renewable energy to power its data center, and aims to be carbon-neutral by 2040. It has introduced the “Project Zero” program.

II. In June 2022, Vantage Data Centers signed a 20-year Power Purchase Agreement (PPA) with SolarAfrica, in which the company will procure 87 MWp of solar energy that will be used to power its new facility.

SEGMENTATION INSIGHTS

• Data centers invest in power infrastructure with a minimum N+1 redundancy. In 2022, UPS systems accounted for a market share of more than 30% of the total electrical infrastructure in data centers.
• Data centers are investing in cooling infrastructure due to the high-temperature climate in some African countries. In 2022, cooling systems accounted for a market share of more than 65% of the total mechanical infrastructure in data centers. Air-based cooling contributed to more than 70% of the cooling technique in the African region.
• There has been significant growth in establishing data centers in the region, specifically in the Tier III and Tier IV certification categories. Many private and public entities, including those in the BFSI, education, and government sectors, have obtained Uptime Institute certifications during the design phase or for their completed facilities. This demonstrates a strong commitment to high reliability and operational excellence in data center infrastructure.

SEGMENTATION ANALYSIS

Segmentation by Colocation Service

• Retail Colocation
• Wholesale Colocation

Segmentation by Infrastructure

• Electrical Infrastructure
• Mechanical Infrastructure
• General Construction

Segmentation by Electrical Infrastructure

• UPS Systems
• Generators
• Transfer Switches & Switchgear
• Power Distribution Units
• Other Electrical Infrastructure

Segmentation by Mechanical Infrastructure

• Cooling Systems
• Racks
• Other Mechanical Infrastructure

Segmentation by Cooling Systems

• CRAC & CRAH Units
• Chiller Units
• Cooling Towers, Condensers & Dry Coolers
• Other Cooling Units

Segmentation by Cooling Technique

• Air-based Cooling Technique
• Liquid-based Cooling Technique

Segmentation by General Construction

• Core & Shell Development
• Installation & Commissioning Services
• Engineering & Building Design
• Fire Detection & Suppression
• Physical Security
• DCIM/BMS Solutions

Segmentation by Tier Standard

• Tier I & II
• Tier III
• Tier IV

GEOGRAPHICAL ANALYSIS

• In the Africa data center colocation market, South Africa, Kenya, and Nigeria are the developed data center markets in the region.
• South Africa represents more than 60% of the African region's power capacity, followed by Nigeria and Kenya.
• Data center expansion in the African region is driven by the emergence of smart cities, special economic zones, and free trade zones, coupled with government incentives and exemptions. Major countries such as South Africa, Kenya, Morocco, Nigeria, Egypt, Ethiopia, and Ghana have spearheaded investments in smart city initiatives. Examples include the Lanseria and Nkuna smart city projects in South Africa and Nigeria's Eko Atlantic City, all contributing to the region's growing data center landscape.

Segmentation by Geography

• Africa
• South Africa
• Kenya
• Nigeria
• Egypt
• Ethiopia
• Other African Countries

KEY MARKET PARTICIPANTS' INITIATIVES

• The Africa data center colocation market is witnessing increased demand across industries, and acquisitions & joint ventures enable new players to enter the industry, attract customers, and capture a higher market share.

I. Equinix expanded its footprint in the region by completing the acquisition of MainOne, including MDXi, in H1 2022.

II. Digital Realty acquired a major stake of around 55% in Teraco.

Key Data Center Investors

• 21st Century Technologies
• Africa Data Centres
• Digital Realty
• Digital Parks Africa
• Equinix
• Galaxy Backbone
• IXAfrica
• Medallion Communications
• Paratus Namibia
• NTT Global Data Centers
• Rack Centre
• Raxio Data Centres
• Telecom Egypt
• Wingu

New Entrants

• Airtel Nigeria
• Airtel Nigeria
• Cloudoon
• Gulf Data Hub
• Kasi Cloud
• Khazna Data Centers
• Open Access Data Centres
• Vantage Data Centers

KEY QUESTIONS ANSWERED:

1. How big is the Africa data center colocation market?

2. What is the growth rate of the Africa data center colocation market?

3. What is the estimated market size in terms of area in the Africa data center colocation market by 2028?

4. What are the key trends in the African data center colocation market?

5. How many MW of power capacity is expected to reach the Africa data center colocation market by 2028?