Vodacom looks at South Africa and Kenya for new data centre projects

Vodacom is considering South Africa and Kenya for new data centre projects as it expands its investment in artificial intelligence infrastructure across Africa. The company has already started work on a major facility in Egypt and is looking at where similar developments could make commercial sense.

CEO Shameel Joosub says both South Africa and Kenya are being considered. However, there are no confirmed sites, investment figures or construction dates for either market. The move comes as more businesses use AI for customer services, data analysis and day to day operations. These applications require computing capacity that many existing data centres were not designed to handle.

Egypt gives an indication of the investment involved

Vodacom is working with Cassava Technologies and Egyptian company Elsewedy Electric on the Egyptian project through Vodafone Egypt. The first phase is expected to attract around $200 million in investment. The longer-term plan could take the total investment to $1 billion as the facility expands. The project is expected to start with 20MW of capacity, with plans to increase this to 200MW. Vodacom is not funding the entire development on its own. The partnership brings together telecommunications, technology and engineering expertise, while spreading the cost between the companies involved. A similar approach could be followed in South Africa and Kenya.

Electricity will be a major consideration

AI data centres require more than buildings filled with servers. They use powerful processors that consume large amounts of electricity and generate substantial heat. Cooling equipment, backup power and reliable grid connections add to the cost of operating these facilities.

This is particularly relevant in South Africa. Although the country has an established data centre industry, operators still have to consider electricity costs, grid capacity and the expense of securing a dependable power supply. Vodacom will need to weigh these issues against the demand for AI computing services before committing to a new facility.

Other companies are already investing

Vodacom will face competition from companies that have already committed money to African data centre projects. MTN is expanding its data centre ambitions through partnerships, while Teraco, Equinix and Vantage Data Centres have established operations in South Africa.

In Kenya, Airtel Africa is developing a 44MW data centre at Tatu City near Nairobi. These developments show that companies are expecting more demand for cloud services, data storage and computing capacity across the continent. For Vodacom, the challenge will be finding customers willing to pay for the additional capacity. Building a large facility is an expensive exercise, and the business needs enough demand to justify the investment.

What could this mean for African businesses?

More local data centre capacity could give African companies additional options when running digital services and AI applications. Banks, retailers, manufacturers and telecommunications companies need computing facilities to process customer information, manage transactions and run their systems.

There is also work for local businesses involved in construction, electrical installations, cooling equipment, security and maintenance. However, smaller businesses may not immediately benefit from these developments. The cost of accessing AI computing services will determine whether the infrastructure reaches beyond large corporations. Vodacom has identified South Africa and Kenya as possible locations for further investment, but the company still has decisions to make around funding, electricity and customer demand.

Egypt is the project already under development. Whether South Africa and Kenya follow will depend on whether Vodacom can make the numbers work.