Although the oil deposits identified in Côte d'Ivoire promise new resources for the state, negotiations with the many partners involved are ... still ongoing. To facilitate this, oil company Petroci is being transformed into a 100% state-owned company.
Nasdaq-traded Equinix this month agreed to buy MainOne, a provider of data centres and connectivity in West Africa, for $320mn. The all-cash purchase is the “first step in a long-term strategy to build an African digital infrastructure company”, Gardiner says.
African population growth and urbanisation is set to trigger massive expansion in Internet use, so increasing demand for connectivity and data centres. Only about 300m out of the sub-Saharan African population of 1.1bn now has Internet access. Google has estimated that 300m people will come on line in the region in the next five years, followed by 500m in the following five years. Nigeria, with the continent’s largest population and a median age of 18, is the ideal entry point, Gardiner says.
Equinix is aiming to enter South Africa and Kenya where it is assessing potential targets, Gardiner adds. She hopes to be able to enter those countries in the next 12 to 24 months. “We need more than just one hub in Africa.” South Africa is currently Africa’s largest data-centre market.
The US company has 237 data centres across 27 countries globally. This is the first time it has expanded into Africa.
- MainOne’s facilities generate about approximately US$60m in annualised revenue, and Equinix paid about 14 times earnings before interest, taxes, depreciation and amortisation (EBITDA) to take over.
- The purchase will be concluded in the first quarter of 2022, subject to regulatory approvals.
MainOne was started by Funke Opeke in 2010 to try to address poor internet connectivity in Nigeria. Opeke, who will retain her role after the acquisition, secured the funding to build West Africa’s first privately owned, open access undersea high-capacity cable. The 7,000-kilometer cable, backed by investors including Africa Finance Corporation and the Africa Development Bank, stretches from Portugal to West Africa. MainOne also owns 1,200 kilometres of terrestrial fibre network across southern Nigeria.
According to UK consultancy Turner & Townsend, the African data centre market is expected to grow at a compound rate of over 12% and will be worth $3b by 2025. The new parent company will allow MainOne to grow faster, and will give it access to companies on the Equinix platform who want to expand into West Africa, Opeke says.
- MainOne is increasing its presence in Lagos, and also plans to start work on a data centre on land owned 50km outside the city.
- Covid-19 has quickened adoption of Cloud use and accelerated demand for data centres, Opeke says.
- She sees content providers, automation services, Nigerian fintech, and companies needing to enable work from home as areas where data-centre demand is likely to increase. “We will be investing more capital to grow faster.”
- The company is working with unspecified partners to increase the number of cable landings in West Africa, Opeke says.
- Opeke is also planning to expand the company’s presence in Côte d’Ivoire in 2022.
Equinix sees African data centres and connectivity as a one-way bet.
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