With a background in cybersecurity, CEO Charly Bahaous is from Israel and relocated to South Africa in 2006. Under his watch,  Touchnet has grown to encompass over 300 employees across various sub-sectors. The Company's portfolio includes a fibre management and construction business, cybersecurity sourcing and distribution, and a recently initiated remote hand's smart driving system with approximately 250 personnel on board. There is a 40-member staff based in South Africa dedicated to the Internet Service Provider (ISP) operations, complemented by numerous partners such as 251 in Ethiopia and Wasp in Ghana.

Fortune: The global cloud service is dominated by centralised systems. Competing with giants like Google and Amazon. What do you plan to do to penetrate the market share as a decentralised service provider?

Charly Bahaous: We bring proximity. Falling within the standards and regulations of the country while being easily accessible to local clients addresses latency and data protection. Decentralised clouds also spare expenses. Having access to localised mini-cloud environments will give businesses the flexibility to scale on demand, instead of laying out capital investments and waiting for long-term returns.

Q: TouchNet is operational in eight African countries. Does the underdeveloped digital infrastructure in most parts of the continent affect its services?

It is tough, but we are hopeful. ICT hubs, undersea and terrestrial expansion of fibre and increasing content are all planting the seeds to slowly make the change. We are observing the emergence and expansion of data centres; Raxio in Ethiopia, Paratus in South Africa, Pikes in Ghana and others in northern Africa represent hope. We depend on their expansions but patience is crucial.

Q: What parameters led you to recognise the Ethiopian market as promising?

We sensed the liberalisation following Safaricom Ethiopia's traction and started setting things into motion as of January 2023; here we are 12 months later. The ability to provide local sovereign cloud while paying in Birr makes the services convenient and affordable with access to global markets for software service providers.

Q: Evolved threats are challenging the cybersecurity with development of Artificial Intelligence. What strategies does your service employ for data protection?

There are compliance issues in any infrastructure as a service; from both data protection and a privacy perspective. Most controls were already enabled from the access control perspective while we have added certain anti-ransom technologies. Our minimum requirements are ISO 27001 from a standard perspective and the GDPR in terms of data privacy. There are additional requirements in each country which we happily adjust to. Countries like South Africa have introduced the Protection of Personal Information Act (POPIA), which adds layers of protection.

Q: With the pending Data Protection Proclamation law, do you rely on local partners to analyse new markets or conduct independent analysis?

As a responsible business, we check and verify the direction a country is heading through publications and available statistical data. However, partnerships play a major role where enabling growth would be beneficial for both.

Q: What benchmarks do you apply when selecting partners?

People and values make or break a business; there is no other way. We also try to give smaller Internet Service Providers (ISPs) and telecoms a fair fight in competing.

Q: Data sovereignty is an essential part of the business. Has the African Union's Data Protection Act factored into your operations?

Having control measures is very welcome and the AU policy hit the sweet spot. It allowed for building blocks and modelling capabilities that can slowly grow to unlock the full potential of a covering cloud without the massive capital expenditure associated with it. That is exactly what we did.

Q: What is your value proposition in terms of interoperability?

We are agnostic when it comes to co-existing with other cloud providers in parallel, on-premise, in the data centres. We do not plan to charge for migrating own data from one system to another, which is a major sticking point for businesses alongside Application Programming Interface (API) integration with other service providers one might already be using.

Q: What potential market segments do you seek in Ethiopia, observing other countries you operate in?

A big growth has been witnessed around sports betting platforms recently as they need local data for their transactions in other countries. Manufacturers, financial institutions and insurance companies desire secure, encrypted services with anti-ransom capabilities with growing threats to cybersecurity. E-learning is also massive. Most businesses with high hardware costs are inclined to adopt cloud services in software provision. Content creators are also a big part of our strategy in 2024-25 for self-service, as the number of our nodes has increased to 500 globally.

Q: Ethiopia has been making headway in digitisation. Where do you see your business in the next couple of years?

Keep opening up and the sky is the limit. The ICT space is expanding with more programmers and a large youth demographic which is an immense potential.

Q: Are you still optimistic about the growth potential considering the proliferation of conflict and economic instability in parts of the continent?

Why not? Look at Europe and the Middle East. There is instability, but I am always optimistic if tomorrow is guaranteed. I trust my people and what I observe on the ground. Rolling out into eight countries in a single year is unheard of; people need these services and we will give them a technology that works.

Using cloud service as an entry point, 251 Telecom under Addis Alemayehu is venturing into the telecom sector. He recounts a journey spanning 25 years, initiated by the signing of an MoU with Vodacom in 1998 when the Ethiopian telecom market was closed. The Company had to bide its time until the regulatory environment caught up marked by the entry of Safaricom Ethiopia into the market. Granted a virtual Internet Service Provider (ISP) and mobile services license from the Ethiopian Communication Authority, the company's plan is contingent upon the ongoing viability of the policy framework.

Fortune: Why did you decide to enter the cloud service provision?

Addis Alemayehu: The main motive, like most businesses, was a point of pain. We invest in technology startups. Paying around 150 dollars for each of our 16 companies to host services has become a burden. Cloud services are in demand, with local companies paying for them in dollars.