As the digital economy continues to expand, data centers have become the backbone of technological advancement, ensuring seamless connectivity, and powering the next generation of innovation. Similarly, the growing adoption of AI and data-heavy applications is rising, raising critical questions regarding scalability and investment.
In an exclusive interview with Telecom Review, Eng. Amjad Osama Arab, Chief Wholesale & Partnerships Officer at Salam shed light on the state of data center readiness in the Middle East, the level of intra-regional connectivity, and the infrastructure required to support emerging technologies.
Data centers are pivotal for the digital economy. Can you speak to the current state of, and future plans for, data center readiness within the Middle East?
The Middle East is experiencing rapid growth in its data center industry, driven by increasing digital transformation and supportive government policies. As of the end of 2023, there were approximately 73 data center colocation facilities in operation across the region. Being the largest economy in the region, Saudi Arabia is rapidly expanding its data center infrastructure, supported by significant government investments. Saudi Arabia plans to build 40 new data centers, aiming to become a regional data hub. Saudi Arabia is expected to attract more than USD 18 billion in data center investments by 2030, aiming to increase its installed capacity from ~300 MW to ~1,300 MW in 2030. This expansion is part of the broader Vision 2030 initiative to diversify the economy and enhance digital infrastructure.
The rollout of 5G networks and the adoption of emerging technologies like artificial intelligence (AI) and edge computing are expected to drive further demand for advanced data center infrastructure. Salam is embracing technologies like 5G, AI, and the Internet of Things (IoT) to drive innovation. We are expanding our digital services portfolio to support smart cities, logistics, e-commerce, and industrial automation.
How would you assess the level of intra-regional connectivity within the Middle East, and what improvements could be made to enhance regional communication and data exchange?
The enhancement of internet exchange points (IXPs) in Saudi Arabia significantly improves local traffic management, reducing latency and increasing network resilience, especially with the development of advanced fiber-optic and 5G networks. For Salam, expanding IXPs is crucial to support the digital demands of today's applications.
Expanding fiber optic networks into underserved areas enables widespread high-speed internet connectivity, which is essential for robust digital services. Strategic partnerships, such as Salam's collaborations with hyperscalers and government entities to develop the Saudi Arabian Internet Exchange (SAIX), are vital. These alliances drive investment in digital infrastructure and innovation, aligning with Saudi Arabia's Vision 2030 to transform the nation into a leading digital hub and stimulate economic diversification.
Assessing the connectivity readiness of the region is crucial for technological advancement. From your perspective, how prepared is the region in terms of connectivity infrastructure to support emerging technologies and data-heavy applications?
Our strategic location, growing digital economy, and supportive government policies present unique opportunities for connectivity infrastructure development. The rollout of 5G networks in Saudi Arabia provides the high-speed, low-latency connectivity required for applications like IoT, autonomous vehicles (AVs), and smart cities. Advanced fiber optic networks are being expanded, supporting high-bandwidth applications such as video streaming, cloud computing, and AI. Through its majority-owned subsidiary, TLS, Salam has engaged in a strategic collaboration with a prominent data center owner in the Kingdom to support its growth strategy and contribute to the overall digital transformation goals of Saudi Vision 2030.
Governments and private sector entities are investing heavily in expanding and upgrading connectivity infrastructure. This includes the development of new data centers, submarine cables, and enhanced broadband networks. Not only that, revisions to regulatory frameworks are being implemented to accelerate infrastructure deployment and encourage investment. This includes enhancing spectrum policies and fostering public-private partnerships.
With the rise of artificial intelligence (AI), there's an anticipated increase in demand for data centers. How will AI impact the need for new data centers in the region?
The Middle East is seeing significant investments in data center infrastructure to support AI. For example, Saudi Arabia plans to build 40 new data centers, aiming to become a regional hub for digital services. Salam operates key data centers in Riyadh, Al Khobar, and Jeddah to provide widespread cloud services and infrastructure support across Saudi Arabia. The company is also pursuing additional data center partnerships with TLS to expand its service offerings and strengthen the national digital landscape.
AI applications, particularly those involving machine learning (ML) and deep learning, require substantial computational power. This demand is pushing the need for more advanced and powerful data centers capable of handling these intensive workloads. AI generates and processes vast amounts of data, so data centers need to expand their storage and processing capabilities. This includes not only increasing capacity but also enhancing the efficiency and speed of data handling. This has led to innovations in data center design and the adoption of renewable energy sources to meet these demands. Through its majority-owned subsidiary, TLS, Salam has entered a strategic partnership with a leading data center owner in the Kingdom to further its growth strategy and support Saudi Vision 2030's digital transformation objectives.
Collaborations with global tech giants like Google, Microsoft, and Amazon are bringing advanced AI capabilities to the region. These partnerships are crucial for developing AI-ready data centers that can support the growing demand.
The availability of submarine cable systems greatly enhances global and regional connectivity. Could you elaborate on the current state of submarine cable systems in the region? Are there any future projects that might enhance this infrastructure?
The region is connected by several major submarine cables, including the SEA-ME-WE series, the FLAG Europe-Asia (FEA) cable, the FALCON cable, the TGN cable, the AAE-1 cable, the PEACE cable, and the EIG (Europe India Gateway) cable. These cables link the Middle East to Europe, Asia, and Africa, providing high-capacity, low-latency connections and serving as hubs for regional and international data traffic. In fact, Salam owns two international cable landing stations in Al Khobar and Jeddah, connecting Saudi Arabia to global networks through submarine cables and enhancing the overall connectivity and performance of their data centers.
The 2Africa cable, one of the longest submarine cable projects in the world, will connect 23 countries in Africa, the Middle East, and Europe. It includes landing points in Saudi Arabia and Oman, significantly enhancing connectivity and capacity in the region. These projects will provide faster, more reliable internet connections, supporting the region's digital economy and enabling the growth of cloud services, big data, and AI applications. The Middle East is positioning itself as a key player in global data exchange and digital transformation by enhancing its digital infrastructure.
