Airtel Nxtra plans to invest Rs 5,000 crore to triple data center capacity by 2025

CIOReviewIndia | Thursday, 30 September 2021, 10:25 IST

Airtel Nxtra plans to invest Rs 5,000 crore to triple data center capacity by 2025Bharti Airtel’s data center entity, Nxtra, plans to invest Rs 5,000 crores by 2025 to triple data center capacity by 2025 in the country to over 400 MW to meet the surging demand coming from domestic and global customers and to prepare for 5G technology.

Under the expansion, Nxtra will set up seven new data center parks in Mumbai, Pune, Bangalore, Hyderabad, Noida, Chennai and Kolkata, taking the total data center count to 17. It already operates 120 edge data centers to address demand coming from tier 1 and tier 2 cities.

The Sunil Mittal-led telco also unveiled a refreshed brand identity ‘Nxtra by Airtel’ for its data centre business. The entity will also focus on expanding capacity of existing data centers in India.

Ajay Chitkara, Director and CEO, Airtel Business said that the expansion will be funded using the company’s own accrued cash flow and funds from Carlyle Group’s recent investment. “And, beyond that if there is any cash that is needed then we will go in the debt market and generate the funds.

Carlyle had last year acquired 25% stake for $235 million in Airtel’s Data Centre business at a valuation of $1.2 billion

“In last three years, our revenue has tripled for data center business. We expect it to continue to grow as it is a huge opportunity. We are the only integrated player which can offer connectivity and data centers. We are ensuring that every new and existing cable system land into these data centers,” Chitkara said.

As per Airtel’s estimates, the data center market in India will reach $4 billion in the next 4 years. The Indian data centre industry is expected to more than double its installed capacity from an approximate 450 MW to 1074 MW by 2023.

India used to access content from global locations and this situation will reverse because of digital adoption and Indian consumers are becoming global.

“India will be one of the biggest hubs not only for domestic customers but for APAC, SAARC and the Middle East region. We serve around 400 customers..we serve a portfolio of customers, which are global in nature and APAC is a large part. Some of these companies need to serve Indian customers,” he said.

Airtel is looking to acquire a diversified set of customers for its data center business by tapping the Indian government’s various initiatives and projects, large enterprises, content or OTT companies and banking and financial companies.

“We are not only focused on hyperscale customers or large cloud players. We see huge growth happening in the domestic India ecosystem...this portfolio will ensure that Airtel remains at right high margins,” Chitkara said.

Chitkara said that in the coming years, 5G will drive the consumption of gaming, content, and lower latency applications. “It can only be supported if data can be stored closer to the user. 5G will drive data consumption and that can be served through larger data centers. These data sensitive apps are used in tier 2 and 3 cities, and that’s where we are focusing through edge data centers,” he added.

Airtel said that neighbouring countries like Nepal, Bhutan and Bangladesh are one of the strongest areas for the company. “...more than 50% of their internet consumption is being taken care of through Indian data centers.”

Nxtra by Airtel is already aggressively scaling up use of green energy for its data centres and aims to source 50% of the power requirements of these centres through renewable sources as part of Airtel’s overall GHG emission reduction targets. Nxtra by Airtel also recently commissioned captive solar power plants in the state of Uttar Pradesh & Maharashtra with still more in the pipeline.

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