Etisalat Group, the UAE’s biggest telecoms operator, and artificial intelligence services provider G42 signed a binding agreement to merge their data centre services to create the UAE's largest data centre provider in an effort to cater to the rising digital requirements.
The joint venture, which will combine 12 data centres owned by the Abu Dhabi-based companies, will operate under Khazna Data Centres.
G42 and Etisalat Group will own 60 per cent and 40 per cent, respectively, in the new joint venture, the companies said on Wednesday.
The deal will allow both parties to increase the value of their infrastructure assets, without affecting their respective commercial positioning, client relationships and leading market positions.
“Etisalat and G42 are embarking on a bold new journey that will allow us to leverage our investments and expertise to deliver next-generation digital infrastructure," said Etisalat Group chief executive Hatem Dowidar.
Data consumption has increased over the past year owing to the coronavirus-induced remote work trends and this has fuelled the adoption of cloud services.
The data centre market in Mena region is expected to grow at a compounded annual growth rate of around 8 per cent to hit $5 billion by the end of 2026, according to a study released this year by Arizton Advisory and Intelligence.
The UAE has led in terms of attracting investment into data centres, the study showed.
In 2019, Software company Microsoft opened two data centres, one each in Abu Dhabi and Dubai. Amazon Web Services, the world's biggest cloud storage service provider, said it will open three data centres in the UAE in the first half of 2022.
Dubai-based telecoms operator du last month began operations at its own data centres, one in Abu Dhabi and the other in Dubai.
Peng Xiao, group chief executive of G42, said the partnership will strengthen the UAE’s data centre capabilities and its economic ambitions.
"As data storage and cloud infrastructure demand continues to rise in the UAE and globally, this new partnership between Etisalat and Khazna, our data centre business, will allow the country to accelerate its digital transformation journey, propelling public and private organisations into a new era of intelligence, resilience, flexibility and commerciality," he said.
Hassan AlNaqbi, chief executive of Khazna Data Centres, said the company, with a capacity of 300 megawatts, will be the "crown jewel" that will support the growth trajectory of businesses and their ability to manage the level of connectivity required to effectively deliver services to partners, customer and users.
Etisalat and G42 are embarking on a bold new journey which will allow us to leverage our investments and expertise to deliver next-generation digital infrastructure
Hatem Dowidar,
chief executive of Etisalat Group
Salvador Anglada, chief business officer of Etisalat Group, said the “combination of our data centre capabilities will deliver a unique portfolio of infrastructure services for current customers and will also create a market leader for the future to global hyper-scalers".
"We believe that this transaction will further strengthen the UAE as a preferred destination for global technology companies seeking world-class presence in the region, and propel the development of the digital ecosystem in support of the growth ambitions, which UAE is well positioned to capitalise upon.”
The closing of the transaction is subject to customary procedures, including the finalisation of transaction documents, regulatory approvals and certain administrative procedures.
Company profile
Name: Thndr
Started: October 2020
Founders: Ahmad Hammouda and Seif Amr
Based: Cairo, Egypt
Sector: FinTech
Initial investment: pre-seed of $800,000
Funding stage: series A; $20 million
Investors: Tiger Global, Beco Capital, Prosus Ventures, Y Combinator, Global Ventures, Abdul Latif Jameel, Endure Capital, 4DX Ventures, Plus VC, Rabacap and MSA Capital
The biog
Favourite hobby: taking his rescue dog, Sally, for long walks.
Favourite book: anything by Stephen King, although he said the films rarely match the quality of the books
Favourite film: The Shawshank Redemption stands out as his favourite movie, a classic King novella
Favourite music: “I have a wide and varied music taste, so it would be unfair to pick a single song from blues to rock as a favourite"
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
- Solo riders only, no passengers allowed
- Do not drive outside designated lanes
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MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
UAE currency: the story behind the money in your pockets
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Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
COMPANY%20PROFILE
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Our legal consultants
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
