Mr Ike Nnamani is the Founder/Chief Executive Officer of Medallion Communications, a leading data centre company in Nigeria, with tentacles in other African countries. In this interview with Techberg, he speaks on the formation of the company, prospects and challenges as well as other ICT industry issues. Excerpts:
How did the idea of starting Medallion start?
The medallion was conceived around 2001/2002 when the telecom industry in Nigeria was undergoing full deregulation with the licensing of several telecom operators by the Regulator. I realized there was a place for a carrier-neutral service provider who will act as a bridge across the various licensed operators and provide shared infrastructure for use by the service providers. This led to the development of a business model for interconnecting clearinghouse services as well as a collocation service provider. Back then we call it carrier hotels and in later years datacentre service provider became a more prominent term to describe the service.
How has the data centre market in Nigeria grown over the last decade or so?
It has been interesting to see how the service has grown and evolved. When we started the closest thing to what we have today was the NITEL PTO rooms where operators collate to cross-connect their mainly voice equipment. Today we have world-class data centres in the country and the benefits of having efficient data centres in the country are now being appreciated by all. We started by creating peering centres where operators can peer and exchange traffic seamlessly. The fact that we were not competing with any operators in services to subscribers was a major selling point as all operators saw us as carrier-neutral and preferred during business with us than any of the other operators who also have datacentres but are offering services to subscribers.
Over time as international operators like Google came into the country and choose Medallion as the data centre for their infrastructure the ecosystem within Medallion increased as more operators came to peer and connect with them. Today we have all the submarine cables, OTT Players like Google and Facebook as well as other major international operators are now peering with key Nigerian based operators at Medallion datacentre and this has led to tremendous growth in the delivery of telecom and ICT services in the country. The success of Medallion in the datacentre space has encouraged other players to come into the space and this is good for the country. However, there is still a lot of work to be done in the space as the demand for data centre services still outpaces the supply.
How are companies which are moving from captive data centres to cloud computing affecting the data centre business in Nigeria?
This is a positive development for datacentre providers like Medallion. The operators offering cloud computing services need the type of data centres built by Medallion to offer efficient services. So as more companies and operators move from on-premises datacentres to shared infrastructure in a carrier neutral datacentre, we are seeing an uptake in the request for our service offering. We support both the cloud computing guys and those that prefer on-premises hosting of their services in our datacentres.
What are the operating challenges in the industry, mostly on scaling up and what would you suggest the government should do?
Reliable and cost-effective power supply still remains the biggest challenge for data centre operation in Nigeria. Datacenters are meant to operate on a 24/7 basis so with an epileptic power supply it becomes very difficult to operate cost-effectively. We practically have to generate our own power for the data centers which is more expensive than the supply from public power sources if it was available. The government has to do something about the public power supply sources to help alleviate this challenge
The COVID-19 lockdown forced many organisations to rely on ICTs, as one of the service providers in the industry, how has the pandemic affected your business?
It has been a mixed situation for us. As was noted there has been an increase in the adoption of ICT services and as a data centre operator we have seen an increase in requests for our service and this is a positive development. However, the cost of running the data center has also gone up as a result of Covid-19 related challenges in the country. We also had to do investments in being Covid-19 compliant in our operations. However, we see indications of more uptakes of the data center services in the coming months and years as the country moves more towards a digital economy
With heavy dependence on ICT infrastructure by the government as well as businesses during the pandemic, what lessons should be government be taking out of this crisis in terms of ICT development and infrastructure building?
Nigeria has to see ICT infrastructure as a critical national asset that need to be protected, supported from a financing standpoint, and regulated in a manner that will boost investors’ confidence. Telecom and ICT services need to be seen as an enabler of a better quality of living for the citizens by the government and not just a means to generate tax revenue. The destruction of telecom and ICT infrastructure needs to be stopped as this not only leads to poor quality of services but also results in higher cost of providing services to citizens resulting in financial losses to service providers. The federal, state, and local governments are in a position to address these issues and must do so if the promise of a fully digital economy in the next few years is to be met
What are the larger goals for Medallion in the coming future? What is the roadmap?
The medallion will continue to be the leader of carrier-neutral data centre services in Nigeria and the sub-region. We will be embarking on an expansion of our existing data centres in Lagos and Abuja in the coming months and will also be building some new datacenters in several cities in Nigeria as well as a hyper-scale datacenter in Lagos. We will also be building new data centres in a number of West African countries in the coming months. Work on all this is at top gear and this will greatly benefit the countries of operation and boost the local economy
Kindly share with us your deal with Digital Realty and what should your clients be expecting from this?
Thanks for that question. As was stated above, for Nigerian to transition to a fully digital economy, it will need next-generation telecom infrastructure. The datacenter is a critical part of this. To attract global players in the telecom and ICT space to Nigeria, we must have world-class datacenters operating at hyper-scale levels. Nothing like that exists in the West African sub-region today. Although Medallion has a robust data center business and is rated as one of the best datacenter operators in the region, we realized we needed a global player with international experience to work with if we are to fulfil the expectation of the emerging data centre market in the sub-region. This prompted us to go to Digital Realty, one of the biggest datacenter operators globally.
Digital Realty Group, is a global player in the data centre space. With over 167,000 cross-connects from over 4,000 customers spread across 290 datacentres, Digital Realty operates in the Americas as Ascenty; in Europe, Middle East, and Africa as Interxion; and in the Asian Pacific as MC Digital Realty. Digital Realty has an enterprise value of over $60bn and equity market capitalization of over $44bn as of 2021. Together with its funding partners, Digital Realty offers best class datacenter services in any market it operates in. Apart from upgrading our existing datacenters to global standards, new world-class datacenters will be built in the subregion leading to job creation, rapid acceleration of the digital economy, and much needed foreign direct investment into the subregion
What other sector interests you apart from the ICT sector?
I actually started my working career in the oil and gas industry given that I studied Mechanical Engineering in my first degree. So, I still have an interest in general engineering design and manufacturing. But lately, my core areas of interest which are not far from ICT thanks to the convergence of technologies and the new Internet of Things world we live in includes the financial industry, education sector, healthcare, entertainment industry, and real estate development. In all these sectors I am interested in how modern technologies can be used to improve the traditional ways things have been done in the past.