Teraco spending R6 billion on new data centres in South Africa

Teraco Data Environments announced that it has completed its JB3 data centre facility located within its Isando campus in Ekurhuleni, east of Johannesburg.

While the company could not disclose the size of its investment into JB3, Teraco CEO Jan Hnizdo told MyBroadband that it was in the billions of rand.

He also said that Teraco’s capital expenditure programme for the next four years would be in the region of R6 billion.

Teraco will use this money to fund the next sites it is bringing on stream, said Hnizdo.

“We are in the process of finalising Cape Town. We have a big build in JB4 [the fourth Johannesburg facility]. We are expanding Durban,” he said.

“At some point, we’ll also have to break ground on JB5.”

Hnizdo said that their combined campus at Isando, which comprises JB1 and JB3, consumes a total of 80MW of power from Eskom and can provide 40MW of critical IT power.

In addition to seeing huge increases in demand for its data centre facilities, Hnizdo said that data traffic through Teraco’s NAPAfrica Internet exchange had risen exponentially.

Jan Hnizdo, Teraco CEO

Hnizdo explained that it took NAPAfrica seven years to hit 1 terabit per second (Tbps) of traffic in March 2020.

In June 2021 — only 15 months later — the traffic through NAPAfrica doubled.

As of August 2021, the traffic through NAPAfrica is 2.2Tbps.

Hnizdo said that the Covid–19 pandemic has fast-forwarded digital transformation, which is a large part of what is driving the exponential data traffic growth.

He said that roughly 30% of the traffic is driven by rich content such as YouTube, Netflix, and Facebook.

The other 70% is cloud content, essentially business traffic. Hnizdo noted that this includes traffic video conferencing services such as Zoom and Microsoft Teams.

“Our clients use the data centre to scale their IT infrastructure, adopt hybrid and multi-cloud architectures and interconnect with strategic business partners within the Teraco ecosystem,” said Hnizdo.

“Over the last year, we have seen a 48% increase in direct interconnects to public cloud on-ramps, reflecting the increasing trend of cloud adoption by enterprises.”

Aerial photo of Teraco JB3 Data Centre Isando Campus
Teraco JB3 Data Centre Isando Campus

Now read: How South Africa’s Internet traffic changed — from 2014 to 2021

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Teraco spending R6 billion on new data centres in South Africa