India's second-largest service provider, Airtel, has decided to increase its data center business infrastructure.
The company announced it would be investing INR 50 billion ($672 million) to increase capacity to over 4400 MW by 2025, enabling it to scale infrastructure to meet the requirements of the country's growing digital economy.
Airtel also unveiled a new brand identity for its data center business called Nxtra by Airtel. The operator currently has 10 large and 120 edge data centers across the country. It also manages several submarine landing stations. Carlyle Group acquired 25% stake in Airtel's data center business for $235 million in 2020.
There is a massive increase in data consumption per user - as well as in the number of users. Further, the Indian data localization laws demand it stays within the country.
India's enterprises, including small and medium ones, are digitally transforming their businesses and moving processes online. The country is also one of the largest markets for a number of hyperscalers and OTT platforms.
These factors have led to a massive increase in data center demand in India. And with upcoming 5G services, the need for them will soar. With this investment, Airtel wants to be prepared to meet this anticipated demand. It is also important for the company to increase data center capacity because it is focusing on the enterprise segment.
The enterprise business offers better margins and profitability to a service provider, and this is why most telcos, including Bharti Airtel, are focusing on this segment.
Apart from Airtel, several other players are also increasing their data center infrastructure in the country. Google and Amazon are just a few examples. As a result, the industry is expected to more than double its installed capacity from approximately 450 MW to 1074 MW by 2023.
"Airtel has built the largest data centre network in India, and we are now doubling down on this business to scale up our network that will be at the core of 5G and Digital India," says Ajay Chitkara, director and CEO of Airtel Business, in the press release issued by the company. It also mentions that sustainability will be a "big focus" for Airtel as it ramps up its data center business.
Nxtra by Airtel has already commissioned captive solar power plants in the states of Uttar Pradesh and Maharashtra, and is planning to come up with more in the near future.
— Gagandeep Kaur, contributing editor, special to Light Reading