With more investments coming into the expansion of the data centre facilities by various operators, stakeholders in Nigeria’s telecoms industry have passed a vote of no confidence on the current trends where local contents are hosted on the data centre facilities offshore. KUNLE AZEEZ reports
One segment of Nigeria’s $70 billion telecommunication industry, which has become critically important to the data economy is the data centre sub-segment, dealing mainly with secure and efficient hosting of critical business and citizens’ data in-country.
A data centre is a facility used to house computer systems and associated components, such as telecommunications and storage systems.
It generally includes redundant or backup power supplies, redundant data communications connections, environmental controls (such as air conditioning, fire suppression) and various security devices. Despite the presence of players such as Main One’s MDXi, Rack Centre, Medallion and other smaller players in the country, available data suggest that most data in Nigeria are still being hosted abroad, culminating in acute loss of revenue to foreign countries that host such data.
For instance, a report by a webhosting company, HUB8 last December, revealed that majority of .ng and .com.ng websites in Nigeria are hosted in the United States. This development has made Nigeria lose about 72 per cent of revenue it should be generating through local hosting of such websites in the various locally-based data centre facilities in the country.
According to the report, out of the 34,000 sites, less than 1,000 are located in Nigeria, which is only 2.3 per cent of the total. The country of origin for the remaining three per cent of sites could not be identified, so Nigeria’s share is slightly larger, though still not comparable with the amount of hosting abroad. “The dominant countries where site hosting often occurs were determined for the .NG and .COM. NG domains.
The overwhelming number of sites are located in the United States (72 per cent),” translating into loss of 72 per cent hosting revenue for Nigeria, according to the report. .ng is Nigeria’s country code Top Level Domain (ccTLD), which is the country’s digital imprint on the World Wide Web (WWW).
There are also several kinds of data emanating from government‘ s ministries, departments and agencies (MDAs), banks, oil and gas companies, telecoms companies, among others, which are required to be hosted in data centre facilities that are available within the country.
Nigeria’s data readiness
Worried about Nigeria’s low rating on data infrastructure and data economy readiness, which currently stood at between 2-3 per cent, data centre operators have proffered solutions on how best to boost the country’s data economy readiness.
Already, President of Nigeria Internet Registration Association (NIRA), Mr. Sunday Folayan, who has continuously rued the poor local content in the county’s DNS ecosystem, has pointed out that as a country, “we need to encourage local hosting with the Internet Exchange Point of Nigeria (IXPN) and similar organisations such as the operators of the various data centre facilities in the country. With this, we reduce cost of accessing the internet and curb revenue flight to foreign lands.”
Also, data centre operators, who gathered at a recent breakfast meeting organised by Information Technology Reporters Association (NITRA) in Lagos, said one of the ways to improve Nigeria’s data economy readiness was for data centre operators to work together in establishing more data centres across the country.
They also stressed the need to encourage Nigerian business owners and their foreign counterparts, who operate businesses in Nigeria, to domicile their data hosting locally in Nigeria, as against the current practice where most business owners prefer to host their local data abroad, for fear of data insecurity and high service cost.
Managing Director of Medallion Communications, Mr. Ikechukwu Nnamani, one of the major players in data centre space in Nigeria, said: “Nigeria needs to develop local content and more data that would enable Nigerians and Africans to tell their own stories better and change the old narrative.”
He also said Nigeria needed at least two data centres established in each state of the federation, in order to bring data centre operation closer to the people, which he said, would help reduce the cost of data centre services across the country.
According to Nnamani, “If our contents are locally hosted, we should have better opportu nity of telling our own story in a positive light and all these will help our rating to improve.”
A NIRA board member, Nnamani, said he was aware that as at last year, less than five per cent of all active .ng domain names registered in Nigeria were hosted in Nigeria and over 95 per cent were hosted outside Nigeria.
“The implication is that more of the local contents generated in Nigeria are hosted outside the country, amounting to huge loss of revenue stream through capital flight,” he said, stressing that people host data outside of Nigeria because most of them are unaware that there are standard Tier 111 data centres in the country, even though they are not sufficient.
Boosting hosting capacities
Meanwhile, stakeholers have said all that needed to be done was for the existing data Centre operators to boost their hosting capacities by expanding their data centre operations beyond their current location. Director of Operations at Rack Centre, another big player in Tier 111 Data Centre and colocation operations, Mr. Ezekiel Egboye, said Rack Centre is already upgrading its data centre facilities and ready to increase the capacity to accommodate the increasing demand for data centre services.
He said one of the ways to boost Nigeria’s data economy readiness is to ensure that all local data are domiciled locally and hosted locally in Nigeria. Medallion said it is expanding its Interconnect and Data Centre infrastructure to Enugu, Port-Harcourt, Ibadan, Kano and Asaba in an effort to accommodate more service providers in other parts of Nigeria.
Also, General Manager, MDXi, Mr. Gbenga Adegbiyi, said MDXi, is optimistic that the country’s data economy readiness could improve if the current rate at which data centre operators are expanding their operational base are maintained.
According to him, the company is planning to invest N2.5 billion to expand its Lekki facility, while expansion drive would span across Sagamu, Accra, Cote D’Ivoire and Senegal.
Adegbiji revealed that the firm has invested till date, $35 million out of the planned $40 million, saying MDXi is the only data centre to guarantee 100 per cent power uptime availability.
As in-country data centre operators continue to invest towards expanding their networks, stakeholders have called on organisations in the country to leverage the abundant data centre infrastructure to reduce their operational cost and help in curbing annual capital flight being recorded in Nigeria as a result of lack of adequate localisation of Internet-based contents in the economy.
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