Allied Technologies’ (Altech) operations in east Africa are poised to contribute to a third of its parent company’s annual earnings, according to Craig Venter, chief executive of the JSE-listed Altech.
Venter’s belief in the region remains strong despite receiving a flood of criticism from investors for the unit’s dismal performance during Altech’s 2010/2011 financial year.
Altech blamed poor management and the unit’s managing team was replaced with South African information technology (IT) stalwarts.
Venter speaking at the official launch of Altech Kenya Data Networks (Altech KDN) in Nairobi, Kenya this month said, “The key thing for us here is the economies are growing, the political environment is stable and Kenya as an ICT environment is advanced.”
By way of example he said data download speeds were faster, a high definition movie can be viewed within eight minutes in Kenya.
“Kenya has already deployed fibre to the home while in South Africa it has not yet been liberalised,” Venter said.
Connectivity in the region is boosted by the proliferation of undersea cables EaSSy and Seacom including TEAMS, all of which Altech has bought capacity in.
Altech’s confidence in the growth of ICT in east Africa has spurred it to commit up to a further $20 million capital investment over the next three years in its data centre, Altech KDN, said to be the first dedicated data centre in Kenya.
To-date the facility has attracted Kenya’s Equity Bank and Airtel, a major Indian telecoms operator in Africa, as the anchor clients.
The bomb-proof, flood-proof and earthquake-proof basement in the centre will also be home to some Kenyan government records when that section is built in Altech’s new financial year, which begins in March.
The data centre clients straddle across Kenyan borders into neighbouring countries Tanzania, Rwanda, Uganda and Burundi.
Clients bring their servers and routers and Altech hosts the equipment.”It is the very first dedicated data centre in Kenya. Many Kenyan corporations are finding themselves at a crossroads in data management,” Venter told the crowd of dignitaries at the launch.
“Altech views east Africa as growth engine for our company,” Venter said.
Shahab Meshki, CEO of Altech KDN said, the data centre allowed only one minute downtime per week or 52 minutes a year.
Each level consumes 1500 kw of electricity per hour, “which is enough power to cover more than 121 households for an entire year,” Meshki said.
In March 2008 Altech bought a 51 percent stake in Kenya Data Networks.
“A tier three data centre plays critical role for Kenya’s financial services sector. A performance adversary of 10 milliseconds can cost tens of millions of shillings a year,” Meshki explained.
Francis Njoroge, data centre manager said, the facility’s generator capacity could provide up to approximately four days back up electricity.
Njoroge said plans were in place to include solar energy as an alternative power source. The site in Nairobi already hosts several solar panels while the building roof is slanted at a five degree angle to accommodate future solar panels.
Raila Odinga, Kenya’s prime minister who was guest speaker at Altech’s launch said, his country’s IT sector had experienced “tremendous growth” over the past decade and it was projected to grow at an average of 20 percent a year.
“[The sector] has created a significant shift in our economy.”
Odinga said the most significant development had been the advent of mobile money transfer, specifically M-PESA, a product developed in Kenya by Vodafone subsidiary Safaricom and which is finding traction in Africa.
Three out of four adults in Kenya reportedly use M-PESA, which was primarily created to introduce the unbanked to basic electronic banking services but is also used by the banked for payments and to transfer money.
Vodacom Tanzania, a subsidiary of South Africa’s Vodacom is making strides in implementing M-PESA but in its home country Vodacom has not quite unlocked the formula to catapult M-PESA to success.
According to Vitalis Ozianyi, a Kenya-based independent communications and technology analyst, the prospects for 20 percent per annum growth for Kenya’s ICT industry “is influenced by the government’s policy of zero rating most ICT services, which allows duty and VAT free importation of new fully assembled computers and laptops. Consumers and businesses do not pay VAT for locally developed software and ICT systems.”
Kenya’s government is constructing a multi-million dollar Silicon Valley-type centre in Machakos county, southeast of Nairobi which contributes to Vision 2030, a plan to catapult Kenya into an “industrialising middle income country” , achieving at least 10 percent economic growth per annum.
Kenya has commissioned a youth entrepreneurship programme that considers ICT as a key area for innovation and job creation.
“Konza [Technology] City would be a business centre similar to Sandton that would provide modern facilities to meet the growing demand from local as well as foreign investors. Investments in state-of-the-art ICT infrastructure and systems will meet current and future communication needs of businesses,” said Ozianyi.
Middle-class suburbs in Kenya are currently connected by fast cable broadband link, linked to the internet via optical fibre.
Ozianyi said a fibre-link was in place for backhaul for cable traffic to each home.
“Cable users can subscribe to tv as well as internet services. The latter is most popular, because the Ksh. 2000 (less than R200) per month for fast uncapped internet is a great deal for money,” he said.
“The cable service has seen entrepreneurs converting their homes into SoHos (an enterprise with less than 10 employees) for the ICT SMEs,” Ozianyi said. - Asha Speckman