Altech Group plans to set up Sh830m data centres in EAC

Altech Group — the owner of Kenya Data Network (KDN) — will invest Sh830 million in the next one year to build five satellite data centres within East Africa as it seeks to strengthen its competitiveness in offering leased storage services in the economic bloc.

The company intends to use its satellite facilities to tap into regional financial institutions, mobile telecommunication firms and government departments.

The centres will be connected to a bigger data centre that the group opened in Kenya on Friday and which KDN would use as a hub to relieve the region from seeking data backup services in Europe, South Africa and America.

Craig Venter, the chief executive officer, at Altech said that the five satellite centres would be set up in Tanzania, Uganda, Rwanda, Burundi and Democratic Republic of Congo with their financing done internally by the group, which is listed in Johannesburg bourse.

“We are looking at East Africa region as one market and that is why we are putting a lot of focus in it as it provides us with untapped opportunity in data, which is our core business,” Mr Craig told the Business Daily during the opening of data centre in Nairobi on Friday.

Cloud computing

He added: “We already have firms like Bharti Airtel who want to relocate data in their 13 Africa countries here in Nairobi. Others like Equity Bank have also indicated a possibility of using it for redundancy.”

Increased use of Internet has created a high demand for information storage either for security or back up among companies.

KDN has in the past year experienced increased competition from other broadband providers such as Telkom Kenya, Jamii Telecoms Ltd and AccessKenya, which has forced it to look for new revenue stream to boost its earnings.

The firm reported a drop in the revenue from Sh3.2 billion to Sh2.1 billion in six months ended August 31 last year, while operating profit dropped from Sh657.2 million to Sh12.6 million in the period under review.

KDN, however, is expected to compete with Safaricom in this market segment and a South African computer firm — Business Connexion.

Safaricom has teamed up with a local IT firm, Seven Seas Technology, to offer cloud computing, which is one of the services provided by data centre.

Business Connexion on the other hand is targeting government and small businesses with its electronic storage facility that will offer data security and delivery of technology services and software through cloud computing over the Internet to third parties.

It is however yet to launch its services commercially.