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Africa Data Center Colocation Market Outlook 2023-2028: South Africa's Allure as an Investment Hub is Unmistakable with Over 60% of the IT Power Capacity

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Research and Markets

Nov 23, 2023, 18:30 ET

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DUBLIN, Nov. 23, 2023 /PRNewswire/ -- The "Africa Data Center Colocation Market - Industry Outlook & Forecast 2023-2028" report has been added to ResearchAndMarkets.com's offering.

The Africa data center colocation market is expected to reach a value of $1.23 billion by 2028 from $670 million in 2022, growing at a CAGR of 10.64% from 2022-2028.

South Africa takes center stage in the African data center colocation market, wielding its influence as the primary driver of capacity in the region. With over 60% of the IT power capacity, South Africa's allure as an investment hub for data center facilities is unmistakable.

Other African nations, including Nigeria and Kenya, follow suit, making substantial investments in data center infrastructure. The impetus behind this regional data center expansion extends beyond South Africa, propelled by the rise of smart cities, special economic zones, free trade zones, and government incentives.

The African continent is witnessing the emergence of smart cities, exemplified by projects such as Lanseria and Nkuna smart cities in South Africa and Nigeria's Eko Atlantic City, all contributing to the burgeoning data center landscape. This growth is further amplified by increased demand across various industries, with acquisitions and joint ventures opening doors for new players to enter the market, attract customers, and secure a larger market share.

Artificial Intelligence (AI) adoption is another driving force behind regional data center investments, exemplified by strategic partnerships like Huawei and ITDIA's "Spark" initiative in Egypt, aimed at promoting AI-based investments and initiatives.

The connectivity landscape is evolving as well, with the deployment of new submarine cables such as Africa-1, 2Africa, India Europe Xpress (IEX), Equiano, Medusa Submarine Cable System, and SeaMeWe-6, all set to enhance connectivity in the African data center colocation market 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.

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.

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.

KEY QUESTIONS ANSWERED:

  • How big is the Africa data center colocation market?
  • What is the growth rate of the Africa data center colocation market?
  • What is the estimated market size in terms of area in the Africa data center colocation market by 2028?
  • What are the key trends in the African data center colocation market?
  • How many MW of power capacity is expected to reach the Africa data center colocation market by 2028?

Market Opportunities & Trends

  • Increase In Smart City Initiatives
  • Government Support For Data Center Development
  • Growing Adoption Of Artificial Intelligence
  • Migration From On-Premises To Colocation & Managed Services
  • Rise In 5G Network Connectivity And Edge Data Center Deployments

Market Growth Enablers

  • Increasing Adoption Of Cloud Services
  • Growth In Penetration Of Big Data & Iot
  • Rise In Renewable Energy Adoption
  • Increase In Submarine Cable & Inland Connectivity

Market Restraints

  • Low Budgets & Investment Constraints In Data Center Development
  • Location Constraints On Data Centers
  • Dearth Of Skilled Workforce
  • Security Threats In Data Centers

VENDOR LANDSCAPE

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

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

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

For more information about this report visit https://www.researchandmarkets.com/r/czm5jj

About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

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