Data is now the most valuable resource in the world for the insight that it offers into each of us – but given that consumers generate this resource, should they not also have the right to protect their own personal data? This is the question that underlines the importance of safeguarding digital sovereignty.
In 2017, The Economist published an article asserting that the world’s most valuable resource was no longer oil, but in fact data. In the digital era, data has become a means of production through which countries and regions are able to create local value. However, this value must be protected; in the past, countries may have consented to use overseas data centres, but now realise the value of sovereign cloud infrastructure.
Many countries and regions in the world have issued laws governing data protection and restricting cross-border data flows, including the European Union, Asia-Pacific Economic Cooperation, African Union, Association of Southeast Asian Nations, and Organization of American States.
The EU was the first region to propose protecting digital sovereignty. In May 2018 the union introduced its critical General Data Protection Regulation (GDPR), which provides comprehensive protection to personal data privacy and strictly limits the transfer of data overseas. The EU is also developing its Gaia-X cloud infrastructure to embrace digital sovereignty and has striven to store its data locally, laying the foundation to create value.
However, this awareness is by no means limited to Europe – many African nations are acutely conscious of the importance of data protection, and are implementing acts that can be considered as the African versions of GDPR. The government of Kenya for example launched the Personal Data Protection Act at the end of 2019, while South Africa’s government introduced the drafted National Data and Cloud Policy in April 2021.
As part of its Data Governance Act, the EU encouraged data providers to build a data marketplace aimed at maximizing the value of data.
Within two years, Deutsche Telekom established an EU sovereign data governance structure and trained many local cloud transformation experts – and in the process, it raised European awareness of data sovereignty, establishing itself as both a protector and enabler of data sovereignty in the region.
The operator achieved this via its Open Telekom Cloud, established in 2018. By April 2021, OTC had become the official core node of the EU’s sovereign cloud Gaia-X. During this time, two highly regulated industries – government data and finance – have chosen to migrate their digital business applications from GAA (Google, AWS, Azure) to OTC, enriching the latter’s cloud ecosystem and enhancing its ability to compete against the established players.
Deutsche Telekom’s OTC uses the sovereign cloud to enable European data sovereignty, which in turn allows for operations promoting the development of the European digital industry. At the same time, Deutsche Telekom has been able to rapidly develop its OTC digital payment business. Through this transformation from a traditional telecom operator to a telecom + data operator, Deutsche Telekom has realized significant commercial benefits.
Europe is not the only market that recognizes the importance of data sovereignty; China has also implemented a data localization policy that aims to promote the development of the digital economy by commoditizing data and encouraging its circulation, as well as improving the transaction mechanisms for the data marketplace. China Telecom’s Tianyi Cloud has been selected as China’s sovereign cloud to protect the country’s data sovereignty and push its digital economy.
These case studies demonstrate how local operators have a pivotal role to play in both defending data sovereignty and becoming engines of transformation to create and enable local economic and social value.
The awakening of global data sovereignty is an important opportunity for operators, as it is a strategic control point for them to develop cloud and payment services. Operators in Europe and China have a wealth of excellent practices in building regional sovereign clouds, and operators in other regions can also build sovereign clouds locally to protect local data sovereignty, develop a local digital economy, and open a new blue ocean market in the local digital sector.
As the trend towards global data sovereignty intensifies, operators combine their own best connections and best platform advantages to build a regional sovereign cloud, allowing them to transition from a traditional telecom provider role to becoming telecom + data providers.
Building a local sovereign cloud allows operators to gather important data from key sectors such as government and finance, enabling them to act as sovereign data operators and provide cloud and digital payment services. They will be able to realize the commercial benefits of the digital future, as well as playing a role in cultivating talent and optimizing the division of labour in the digital industry.
