Telecom conglomerate Bharti Airtel on Thursday said it will invest Rs 5,000 crore ($673 million) in expanding its data center business to meet customer demand in and around India.
Airtel Business Chief Executive Ajay Chitkara said its Nxtra unit will invest by 2025, with plans to create a data center economy in 80 Indian cities, adding that the move will take its installed capacity to over 400 MW.
“There is a huge capacity and huge demand (for data centres) in the next three to four years’ time,” Mr. Chitkara told a virtual news conference.
Nxtra currently operates 10 large and 120 edge data centers, or small data processing facilities, across India and the expansion is part of a strategy by telcos to add new revenue streams to their business and woo enterprise customers that typically offer higher margins. We do.
The business plan also comes at a time when traditional voice services face new competition from free calls to apps like Facebook’s WhatsApp and Signal.
An affiliate of US private equity group Carlyle last year bought a 25 per cent stake in Nextra. Airtel still holds 75 per cent stake.
Navin Mishra of research firm Gartner said public cloud spending in India is expected to exceed $12 billion by 2025.
Airtel’s rival Reliance Jio, which is controlled by Mukesh Ambani, tied up with Microsoft to build data centers across India in 2019 and partnered with Google this year to boost its enterprise and consumer offerings, Because it is planning to launch 5G services.
Separately, Airtel said Nextra will increase the use of green energy for its data centers, aiming to source 50 percent of its power requirements from renewable sources.