Rising electricity costs worry data providers

Data operating centers in Africa are facing rising electricity costs, which has many concerned that it could adversely affect their ability to continue to provide services at current rates. Analysts and industry leaders alike are warning that if prices of electricity are not capped soon, the additional charges will be pushed on to customers.

“It is definitely a worrying situation facing the sector,” said Khalil Jalilya, a Kenyan telecom industry analyst based in Mombasa. He added that if “governments don’t take direct action to help curtail these price rises, then the customer is going to start feeling the pinch at the bank.”

Operators have invested heavily in data centers in Zambia, Kenya, Nigeria and South Africa in a push to unseat Europe and the United States in the sector and the increase in broadband Internet services has largely been a result of these efforts, but the costs continue to pile up for the centers.

The price hikes are a major threat to what has been a constant growth in these sectors and analysts like Jalilya are worried that without government intervention, the continent could see a major slowdown.

“It is certainly something to watch. We have seen a number of investments being made in recent time to help buttress the data centers on the continent, but this was largely due to the low costs of maintaining their operations, so if it rises, we should keep an eye on this development,” he added.

By Staff