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Teraco's R1bn investment flows from demand across Africa

Teraco's R1bn investment flows from demand across Africa

The announcement of further investment of R1 billion by Teraco in what the company claims is its largest infrastructure build project to date, attests to strong growth in the demand of digital services on the continent according to industry analysts.

Arthur Goldstuck, Managing Director of World Wide Worx says the investment is an important development, specifically in terms of what it communicates about prospects within Africa.

"It gives a powerful indication of the massive growth in demand for digital services by businesses across Africa, and points to continued massive potential growth. The IDC is expecting 19% compound annual growth in public cloud demand over the next five years, which tells us just how explosive the growth is going to be by year five. The investment prepares infrastructure for this growth, but also makes further growth possible, since it puts in place the infrastructure that makes it possible for both existing and new businesses and initiatives to leverage the vast possibilities of the cloud, of online services, and of using computing power in the cloud to overcome physical barriers to growth. When the build-out is complete, it will provide much of sub-Saharan Africa with world-class data centre facilities."

Teraco has revealed that the investment will be channeled to its Isando Campus (JB1) in Johannesburg in two phases.

The first phase, already underway, adds 2 000 cabinets to the facility to bring the total JB1 Campus capacity to 5 700, while increasing total usable floor space by 4 000 square meters and expanding to a total of 12 000 square meters across the data centre campus.

This part of the project is expected to be completed by Q3 2019 .

In Phase 2, a total of 60MW of power will be reticulated to the site addressing requirements for further expansion after Phase 1 has been completed to bring the total power available to the Isando Campus to a total of 80MW, according to the company.

Jan Hnizdo, Chief Financial Officer, Teraco said he sees continued demand for Teraco's services given the unique business model and secular growth trends as the African continent continues to digitally transform.

Funding for the build is via a combination of internally generated funds and enlarging existing debt facilities from R1.2bn to R1.8bn, said Hnizdo

"Teraco continues to invest significantly into the region's ICT infrastructure and has built what is now Africa's largest data centre. We take pride in our vendor neutral offering, with open access to interconnection and world class resilient data centre infrastructure for all our clients."

Steven Ambrose, CEO of Strategy Worx also believes that the investment into the expansion of Teraco is excellent news for South Africa and Africa in general.

"As the Internet of Things and the global expansion of cloud and interconnected devices continues to expand, the ability to connect to local low latency data centres will also grow exponentially in tandem. This is what Teraco is banking on for the near future. The need for local data centres is also part of the growing need for local hosting of video and other content as the internet gets more and more video based. Local and African companies also need a low latency local partner for expansion into full cloud-based operations, and this will drive innovation and expansion of local cloud-based technology offerings.

Ambrose believes more investment in local data centres can be expected in the next few years as hyper scale data centres become key to the ever-evolving technology space.

"I anticipate we will see greater investment from other players in the next years or two including global players such as Google."

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