Municipalities to be connected in Germany
Homes to be connected in Austria
Data Centres in Africa by 2023
Meridiam has stepped up its focus on this critical segment, building out a team of skilled professionals to access investments in high-speed fibre and data across developed and emerging markets. This is a high-growth, high-priority sector that can deliver benefits for countries, communities and individuals alike.
The pandemic illustrated how critical digital infrastructure can be for linking communities to other essential services, such as healthcare and education, as well as the rising importance of data security and sovereignty. Policymakers around the world also see how access to high-quality digital infrastructure can boost economic growth by creating opportunities for growing businesses to trade and develop new ways of working.
Among the European Commission’s six priorities is a ”Europe fit for the digital age” as the region seeks to become more competitive on the global stage, while at a national level, Germany’s new coalition government identifies nationwide Fibre-To-The-Home (FTTH) and 5G networks as a priority goal by 2025.
While governments are motivated, the path to digital inclusion is not smooth and straight, however. In the race to digitalise, the biggest and most globalised centres are taking the lead, meaning that rural communities and emerging economies risk getting left behind. Unesco figures show that in sub-Saharan Africa, 89% of pupils do not have household computers and 82% lack internet access.
Across this broad and rapidly growing sector, Meridiam is partnering with local authorities and aligning with government programmes to ensure that people and regions can benefit from digital inclusion and that investors access strong and stable investments.
At Meridiam, we are exploring themes across digital infrastructure that can help level the playing field for people and communities around the globe, while building futureproof digital networks and providing the capacity for secure and accessible data as our lives become ever-more connected.
Our investments currently centre on two areas:
• Fibre-To-The Home (FTTH) in underserved
regions in Europe
• Data storage and security in Africa
Europe’s large-scale ambitions require significant investment. According to a study from Boston Consulting Group and European Telecoms association ETNO, some €300 billion of investment will be needed until 2027 to fully deploy fibre and 5G across Europe.
While, some countries are relatively well advanced in their rollouts, such as Norway where over 90% of homes are connected to high-speed fibre. Others such as Germany and Austria lag behind (Germany only has 10% Fibre-To-The-Home (FTTH) coverage) and furthermore face challenges in bringing connectivity to more remote regions.
Meanwhile, decades of underinvestment in parts of Central and Eastern Europe require not only capital and capital markets expertise, but also high operational standards to roll out systems that can aid the region’s ongoing convergence with the rest of Europe.
Business Development Director
Delivering high-quality digital infrastructure that maximises inclusion for people requires close cooperation with public authorities. In some regions, such as Liezen, delivering fibre to the remotest areas needs remuneration models backed with subsidies to be economically viable.
In other, more densely populated areas like Montabaur or Bucharest, entirely privately funded networks are feasible. Nevertheless, strong buy-in from municipalities is essential to ensure that financial targets and impact goals are met.
In Montabaur, the public authorities – comprised of the city and smaller municipalities – hold a 10% stake in the project. This facilitates full alignment on the roll-out plans and timetable, as well as control over costs and budget. A 30-year contract between the partners and anchor tenant Vodafone, which includes an open access obligation, further ensures ongoing operational investment and fair access for ISPs, as well as well-priced quality services for customers.
Partnerships also enable Meridiam to be aligned with the goals of municipalities, such as promoting and positioning regions as attractive places for businesses and residents. These are key considerations in Montabaur and Liezen, where local authorities are keen to stem the flow of inhabitants to larger cities, or even appeal to new residents with a better work-life balance.
We also build and maintain infrastructure that helps cities to be more resilient and competitive for the long-term. Network upgrades need to take account of potential growth over many decades and facilitate new revenue and development opportunities for local authorities with other providers. Our investment in Netcity includes ducts built so they can carry more fibre cables in the future, as well as agreements for city to use the networks.
Data is growing at exponential rates. Some projections estimate that the amount of data created over the next five years will be more than double the amount created since the advent of digital storage. The explosion of that information is raising questions of how to store it safely and easily, as well as concerns about the environmental impact of large data centres with extensive cooling systems.
The situation is particularly acute in Africa with national data often stored off the continent, particularly for smaller countries outside the major economies of Nigeria and South Africa. This in turn raises issues over latency, as well as the sovereign’s ability to protect online information and users.
Our first Raxio data centre in Uganda enables the government to apply national data security rules, while filling a need among businesses such as financial institutions and local internet service providers for secure, reliable and economically attractive data storage.
East Africa Director
The trend towards digitalisation and greater penetration of technology into work, commerce, education and health was accelerated by COVID-19, but was in place long before the pandemic started. While individual technology companies may see a reduction in demand as restrictions end and countries seek to return to normality, many digital services are now embedded in people’s day-to-day lives. And that growth in the digital economy will require extensive new infrastructure to cater for rising demand now and well into the future.
Digital infrastructure is a competitive space, particularly in cities and countries with high penetration and demand for internet services. However, by focusing on countries and regions that are underserved for services and digital capacity, and by partnering with local authorities, Meridiam is identifying and executing attractive investments more off the beaten track. These projects align closely with local authority and government objectives to boost economic growth and make regions more competitive, and can deliver extensive benefits to individuals and local communities through the power of digital inclusion.
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