Digital Realty Expands Coverage And Capacity Of PlatformDIGITAL® Across Africa

Rhea-AI Summary

Digital Realty (NYSE: DLR) and Pembani Remgro Infrastructure Fund have formed a joint venture to acquire Medallion Data Centres, Nigeria's top colocation and interconnection provider.

Medallion operates data centers in Lagos and Abuja, with Lagos being a major connectivity hub in West Africa. This acquisition supports Digital Realty's expansion in Africa, as the continent's internet economy is expected to grow from $115 billion in 2020 to $180 billion by 2025. The deal also includes land for future expansion near the Lagos facility.

Positive

• Acquisition of Medallion Data Centres enhances Digital Realty's footprint in Africa.
• Lagos data center is a leading hub with over 70 carriers, supporting substantial public peering traffic.
• Anticipated growth in Africa's internet economy could generate $712 billion by 2050, presenting long-term opportunities.

Negative

• None.

AUSTIN, Texas, Oct. 25, 2021 /PRNewswire/ -- Digital Realty (NYSE: DLR), the largest global provider of cloud- and carrier-neutral data center, colocation and interconnection solutions and Pembani Remgro Infrastructure Fund announced today the formation of a joint venture to acquire Medallion Data Centres, Nigeria's leading colocation and interconnection provider. 

Medallion operates two data centers, one in Lagos, the most populous urban metropolitan area in Africa with approximately 15 million people, and one in Abuja, the capital of Nigeria.  Medallion's Lagos data center is the leading connectivity hub in Western Africa with over 70 carriers and internet service providers, over 80% of the public peering traffic on the Nigerian Internet Exchange, and a peering point for all subsea cables currently operating in Nigeria with plans to serve as a peering point for the nine new subsea cables scheduled to be in operation in Lagos by 2023. 

With a population of over 200 million, Nigeria is Africa's most populous country and the seventh most populous in the world.  Its GDP is the largest in Africa and was the 26^th largest globally in 2019.  With a large and young population, a growing and diversifying economy as well as a maturing regulatory environment, Nigeria has experienced strong economic growth in recent years. 

As part of the transaction, the joint venture is also acquiring a land parcel adjacent to the Lagos data center to provide near-term expansion capacity.  Medallion's management team, led by CEO and co-founder Ike Nnamani, will continue to lead the business. 

Separately, Digital Realty and Pembani Remgro Infrastructure Fund have successfully partnered with Kenyan data center operator iColo since 2019, and iColo announced today that it will enter Mozambique through the development of its first data center in the country, located in the capital and port city of Maputo. 

The iColo campus in Mombasa was recently expanded to deliver an additional 1.6 megawatts of power and 12,900 square feet of capacity for new and existing customers, along with the new subsea cable landing equipment.  In addition, iColo has expanded its Nairobi campus with the acquisition of an additional 215,000 square feet of land that will support 14 megawatts of future data center capacity. 

Africa is evolving into a major interconnection hub for data-driven businesses that require a scalable, future-proof platform to facilitate global hybrid and multi-cloud infrastructure.  The deployment of PlatformDIGITAL®, Digital Realty's market-leading global data center platform, across Africa will enable multinational and local businesses to rapidly scale their digital transformations by deploying critical infrastructure with a leading global data center provider at the heart of a growing connected data community in the region. 

Quotes
A. William Stein, Chief Executive Officer, Digital Realty
"Over the next decade, there will be huge opportunity for global businesses to tap into Africa's expanding internet economy – with predictions that it could reach 5.2% of the continent's GDP by 2025, contributing nearly $180 billion to its economy (up from $115 billion in 2020).  By 2050, the internet economy has the potential to contribute $712 billion¹.  Through major investment in the continent's internet infrastructure, Digital Realty aims to be a core enabler of these economic and quality of life gains. 

"There is a huge opportunity to both meet growing customer demand for connectivity in Africa and improve the internet infrastructure that serves over one billion people² who don't yet have proper access to the benefits of internet.  The expansion of our platform announced today is a leap forward but it's just the start of our $500 million commitment to investment in the continent over the next decade.  We see a huge opportunity to underpin Africa's expanding internet economy and play a central role in its growth." 

Rahiel Nasir, Research Analyst at 451 Research, part of S&P Global Market Intelligence
"With its youthful population, Africa has seen the rise of a tech-savvy generation that is fueling ever-greater demand for digital services.  This is being boosted by the expansion of fiber networks, terrestrial and subsea connections that continue to connect major metro areas³⁴.  Data centers play a vital role in the communications infrastructure landscape.  Without them, further digital development across the continent risks hitting a roadblock, especially for enterprises seeking colocation and cloud services as part of their digital transformations⁵.  According to our latest forecasts, overall multi-tenant data center capacity in the Middle East and Africa will see a compound annual growth rate of 10% from 2020 to 2023.  We estimate that net operational floorspace will increase from 5.4 million to 7.2 million square feet during the forecast period, with net UPS power rising from around 733 megawatts to almost 900 megawatts⁶." 

Rakesh Kukreja, Managing Director at iSAT Africa
"We need to make internet access affordable, reliable and power efficient for people in rural areas of Africa where low potential revenue and difficulty reaching customers have previously made it impossible.  Digital Realty and Pembani Remgro Infrastructure Fund's expansion across Africa will bring IP aggregation points closer to much of Africa's underserved population, and alongside innovations like LTE and Optimized Satellite for 3G, 4G and Wi-Fi networks, are now helping tackle this challenge.  iSAT Africa's focused aim is to bring these technologies together towards bridging the digital gap in rural and ultra-rural African communities, in addition to bringing the benefits of good connectivity to people and businesses everywhere." 

Additional Resources

• Interxion enters into agreement for controlling interest in iColo and establishes strategic partnership with Pembani Remgro Infrastructure Fund
• iColo contributes to Kenya's renewable energy grid with new hybrid solar system at its
• Explore global deployment opportunities on PlatformDIGITAL®
• in Digital Realty's industry manifesto for open interconnection and next-generation colocation solutions
• Read about our open interconnection manifesto for enabling connected data communities

About Digital Realty
Digital Realty supports the world's leading enterprises and service providers by delivering the full spectrum of data centre, colocation and interconnection solutions.  PlatformDIGITAL®, the company's global data centre platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture (PDx™) solution methodology for scaling digital business and efficiently managing data gravity challenges.  Digital Realty's global data centre footprint gives customers access to the connected communities that matter to them with 291 facilities in 47 metros across 24 countries on six continents.  For more information, please visit digitalrealty.com or follow us on LinkedIn and Twitter. 

About the Pembani Remgro Infrastructure Fund
The Pembani Remgro Infrastructure Fund is a joint initiative established by Remgro, Phuthuma Nhleko and the investment team, based in Johannesburg.  The strategy of the fund is to invest equity and quasi-equity in the full spectrum of infrastructure opportunities on the African continent, with a focus on sub-Saharan Africa.  This includes investments in greenfield transactions; brownfield and secondary transactions; as well as logistics and engineering services companies operating within the infrastructure sector.  For more information visit pembani-remgro.com. 

About the Medallion Data Centres
Medallion Data Centres (MDC) is a carrier-neutral data center operator domiciled in Nigeria and the leading connectivity hub in West Africa.  It has highly connected data centers in Lagos and Abuja and serves a wide spectrum of customers with over 70 carriers and internet service providers.  MDC aims to expand its current operations not only across in Nigeria, but throughout West Africa and become the leading data center operator in the region.  For more information, please visit medallioncom.com. 

About iColo
iColo designs, builds, and operates state of the art carrier neutral data centres to serve a broad spectrum of clients – telecom carriers, ISPs and peering points, IT and cloud providers, content providers, enterprise, and financial services customers.  These data centres are highly connected hubs and provide co-location services including power, security, network access, redundancy, space, and precision cooling to its customers.  iColo is part of Digital Realty (DLR) with 291 data centres in 24 countries across six continents.  To learn more about iColo, visit icolo.io or follow us on LinkedIn and Twitter. 

About 451 Research, part of S&P Global Market Intelligence
451 Research is a leading information technology research and advisory company focusing on technology innovation and market disruption.  More than 100 analysts and consultants provide essential insight to more than 1,000 client organizations globally through a combination of syndicated research and data, advisory and go-to-market services, and live events.  Founded in 2000, 451 Research is a part of S&P Global Market Intelligence. 

About Seacom
SEACOM launched Africa's first broadband submarine cable system along the continent's Eastern and Southern coasts in 2009.  Today SEACOM is the preferred partner for African businesses, network carriers, and service providers.  Through its ownership of Africa's most extensive ICT data infrastructure – including multiple subsea cables and a resilient, continent-wide IP-MPLS network – SEACOM provides a full suite of flexible, scalable, and high-quality communications and cloud solutions that enable the growth of the continent's economy.  SEACOM is privately owned and operated, allowing the company the agility to rapidly tailor-make and deploy new services, commercial models, and infrastructure in response to customer requirements, without the red tape or hidden costs often prevalent in this industry. 

About iSAT Africa
iSAT Africa is an integrated communications services provider specializing in broadcasting and rural connectivity, fixed and mobile satellite solutions, MPLS in Africa and Middle East.  iSAT Africa's various solutions including Terrestrial and Satellite Solutions, are backed by powerful Satellites, African Teleports and Headend infrastructure.  iSAT Africa has its POP, integrated with fiber and satellite services, in more than 30 countries in Africa connecting to the rest of world.  Its innovative solutions and resilient network are used by different verticals including Governments, TELCOS, media, multinationals, network companies and ISPs. 

For Additional Information

Media Contacts
Helen Bleasdale
Digital Realty
+44 7500 044027
hcbleasdale@digitalrealty.com

Investor Relations
John Stewart / Jim Huseby
Digital Realty
+1 (415) 738-6500
InvestorRelations@digitalrealty.com

Safe Harbor Statement
This press release contains forward-looking statements which are based on current expectations, forecasts and assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially, including statements related to the African market, development plans in Africa, including Nigeria, Kenya and Mozambique, PlatformDIGITAL®, the company's strategy, expected growth in digital transformation, and customer demand.  For a list and description of such risks and uncertainties, see the reports and other filings by the company with the U.S. Securities and Exchange Commission.  The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 

¹ International Finance Corporation, World Bank Group: e-Conomy Africa 2020: Africa's $180 Billion Internet Economy Future
² World Bank: Achieving Broadband Access for All in Africa Comes With a $100 Billion Price Tag
³ 451 Research, part of S&P Global Market Intelligence, 'African datacenter growth, Part 1: You ain't seen nothing yet', May 2020
⁴  451 Research, part of S&P Global Market Intelligence, 'African datacenter growth, Part 2: Cash and connectivity, the lifeblood', May 2020
⁵ 451 Research, part of S&P Global Market Intelligence, 'African datacenter growth, Part 2: Cash and connectivity, the lifeblood', May 2020
⁶ 451 Research, part of S&P Global Market Intelligence Datacenter KnowledgeBase, Q4 2020, March 2021

 

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SOURCE Digital Realty

FAQ

What is Digital Realty's latest acquisition related to the stock symbol DLR?

Digital Realty has formed a joint venture with Pembani Remgro Infrastructure Fund to acquire Medallion Data Centres, Nigeria's leading colocation provider, enhancing its presence in the African market.

What does the acquisition of Medallion Data Centres mean for DLR's business strategy?

The acquisition aligns with Digital Realty's strategy to expand its PlatformDIGITAL across Africa, leveraging the growing demand for digital services.

How does the Lagos data center impact Digital Realty's market presence?

The Lagos data center serves as a major connectivity hub in West Africa, connecting over 70 carriers and enabling Digital Realty to meet increasing customer demands.

What is the projected growth of Africa's internet economy relevant to DLR?

Africa's internet economy is projected to grow from $115 billion in 2020 to $180 billion by 2025, which presents significant growth opportunities for DLR.