Bharti Airtel to Invest Around ₹3,500 Crore to Expand Data Centers

Sources report that Bharti Airtel is planning to invest around ₹3,500 crore over 3 years to expand its data centers capacity. The telco will look to expand the same by up to 5 times from the current 100 MW, as it looks to tap in the immense data at the edge.

Bharti Airtel to Double Down on Data Centers

Ahead of the imminent launch of its commercial 5G services, this move will certainly benefit the second largest telco. A person in the know told ET, "Bharti Airtel through its subsidiary, Nxtra Data Ltd, will build up to eight data centres, which would include parks as well…each data park could host up to 100 MW. Some of these could be data centre parks in Pune, Mumbai wherein the company has multiple buildings in one park".

The person further added that an increased load on data centers for the last 18 months has prompted this move. Earlier, the telco was storing most of its data overseas. The person said, "until recently, most of the data being consumed in India was coming from overseas. We used to go to the Internet, pick it up from the Singapore data centre and then consume it". Last year, Carlyle Group bought a 25% stake in Nxtra Data for around $235 million. This investment valued the Bharti Airtel subsidiary at around $1.2 billion. The telco currently has almost 130 data edge centres, and 10 large data centres. These data centers have a total capacity of 100 MW.

The telco has plans to bring their data from overseas using undersea cables. The person said, "Airtel then plans to then take the data to its edge data centres across smaller cities in the country". He further added, "this is a complex business and customers expect bundling the network, data centres, managed services and that is where Airtel has an edge over others".

Data Centers: The Backbone of India's Digitization

Bharti Airtel will also look to compete with other big betters in the segment such as Adani and Microsoft. According to a report from JLL, India's data center industry will grow to almost 1 GW by 2023.

And this expansion is the need of the hour; with India's long-term target of bridging the digital divide, it will require big investments in the sector. JLL estimated that an investment of $3.7 billion over the next three years should fulfil a greenfield development opportunity of 6 million square feet for the industry.

Earlier this year, the Adani Group entered the data centre business by forming a 50:50 joint venture with US-based EdgeConneX to build hyperscale data centre parks in six cities. According to media reports, Microsoft will shortly announce an investment of Rs 15,000 crore to set up a data centre in Telangana. Currently, large players in the local data centre market include Nxtra, NTT, ST Telemedia, Ctrls and Sify.