Djibouti Internet start-up aims to boost broadband speeds across east Africa

By Matt Smith

DUBAI (Reuters) – Internet access in east Africa is still relatively slow and costly but a Djibouti-based technology start-up company has ambitions to help change that.

Djibouti Data Center (DDC), set up by a group of local and international investors 18 months ago, is the first data centre and Internet exchange in east Africa connected to eight fibre optic cables that are part of the main Internet route fromEurope to Asia.

The Internet route travels through the Mediterranean, Red Sea and into the Indian Ocean, and passes by tiny Djibouti, which is sandwiched between Eritrea, Somalia and Ethiopia.

African Internet users have typically enjoyed little benefit from these cables passing along its coast because connectivity to them has been limited, something DDC aims to correct as it plans to expand from its home base into Kenya,Ethiopia, South Sudan, and Somalia, which are all at varying stages of Internet development.

"The Djibouti market itself may be small, but the DDC serves as a unique gateway hub to the many millions of customers in these neighbouring east Africa countries," said Anthony Voscarides, chief executive of Djibouti Data Center.

The company launched services in March 2013 in partnership with Djibouti Telecom and will connect to at least three more cables on the Europe/Asia route next year.

"Africa has historically been challenged by high Internet costs," Voscarides, an Australian former telecoms industry executive, said.

According to The Internet Society, 15.7 percent of Kenya's average GDP per capita is required for broadband access, compared to 6.1 percent in South Africa and less than 2 percent in most of Europe.

In Ethiopia the figure rises to 60.4 percent while in Uganda

it is 31 percent in Uganda and 7.4 percent in Sudan.

Less than 2 percent of Ethiopia's 97 million population use the Internet. But Sydney-based consultants BuddeComm, in a report published last month, said the country's "broadband market is set for a boom following massive improvements in international bandwidth, national fibre backbone infrastructure and 3G mobile broadband services."

Kenya is the biggest market in the region with Internet penetration of 39 percent, the fourth-highest in Africa, according to the International Telecommunications Union.

In terms of median download speeds, however, Kenya is ranked 105th globally, while Ethiopia is 94th, Sudan 154th, South Africa is 116th, according to the Internet Society. Madagascar is the highest ranked African country at 61.

FASTER CONNECTIVITY

DDC's goal is to expand into neighbouring east African countries with small data centres which would then allow telecom operators, cable companies and others in those countries to access the submarine cables off Djibouti via its main data centre.

Access to more cables should spread the load, reduce the impact of cable cuts or other problems in those countries and also increase capacity as Internet penetration and usage rise.

"The results are reduced latency, faster connectivity, and lower costs for network operators and Internet users in East Africa," said Voscarides.

Latency is the time it takes for Internet data to travel from source to destination: the closer together these two points are together, the lower the latency.

Voscarides did not give estimates of how much connectivity could be improved or cost reduced.

DDC's customers include MTN, Belgacom International Carrier Services (BICS) and Telkom South Africa, who can house data at DDC in Djibouti, which connects to the cables running north towards Europe and East towards Asia.

Voscarides said DDC had been "designed to not only reduce costs for operators, but to also add significant value by being a tool for carriers, content providers and other service providers to improve the efficiency, resilience and performance of their networks."

Government regulatory policies and the deployment of new technologies could affect the timing of the company's expansion plans, he said. He did not give a timeframe for the expansion into new markets.

DDC's customers, which also include so-called content delivery networks (CDN), do not pay high import taxes for equipment housed at the facility or need special import permits, he said.

CDNs are the likes of Google, Microsoft and Amazon, although DDC has not confirmed if they are customers.