Airtel’s Nxtra to invest Rs 5,000 crore, aims to boost its data centre capacity

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October 01, 2021 4:45 AM

Telco looks to expand alternate revenue streams, seeks to increase share in enterprises business

“Nxtra by Airtel aims to be at the forefront of this growth and plans to invest Rs 5,000 crore by 2025 to further scale up its industry leading network of hyperscale and edge data centres. This will include new data centre parks in key metro cities,” Bharti said.“Nxtra by Airtel aims to be at the forefront of this growth and plans to invest Rs 5,000 crore by 2025 to further scale up its industry leading network of hyperscale and edge data centres. This will include new data centre parks in key metro cities,” Bharti said.

Bharti Airtel’s data centre arm, Nxtra, will invest Rs 5,000 crore over the next four years to treble its data centre capacity to 400 MW, as the telecom operator aims to expand alternate revenue streams and seeks to increase its share in the enterprises business, a high-margins game.

As part of the expansion, Nxtra will set up seven data centres in Mumbai, Pune, Bengaluru, Hyderabad, Noida, Chennai and Kolkata. The Delhi-based group already operates 10 large and 120 edge data centres in India and manages submarine landing stations. It offers scalable integrated solution to global hyperscalers, large Indian enterprises, start-ups, SMEs and governments.

“Nxtra by Airtel aims to be at the forefront of this growth and plans to invest Rs 5,000 crore by 2025 to further scale up its industry leading network of hyperscale and edge data centres. This will include new data centre parks in key metro cities,” Bharti said.

With 5G around the corner, a fast growing digital economy, enterprises transitioning to cloud and local data storage regulations, India is witnessing strong demand for reliable data centre solutions, it added.

On the rationale behind the expansion, Airtel business CEO Ajay Chitkara said Airtel has built the largest data centre network in India and it is now doubling down on this business to scale up its network, which will be at the core of 5G and Digital India.

“In the past three years, our revenue tripled from data centres. We expect it to continue to grow as it is a huge opportunity. We are the only integrated player who can offer connectivity and data centres. We are ensuring that every new and existing cable system land into these data centres,” Chitkara emphasised.

The expansion will be funded through the firm’s cash flows and funds from Carlyle Group’s recent investment. Nxtra will increase the use of green energy for its data centres, aiming to source 50% of its power requirements from renewable means.

Nxtra’s expansion comes after Bharti’s rival, Reliance Jio, inked an agreement with Microsoft in 2019 to build data centres across India, and in 2021 partnered with Google to boost enterprise and consumer offerings, as it plans to launch 5G services.

India’s data centre industry is expected to more than double its installed capacity from around 450 MW to 1,074 MW by 2023. Around 508 MW of supply is expected to be added between H2 2021 and 2023. The market is projected to hit $4 billion (around Rs 29,500 crore) by 2025.

According to JLL India, demand for data centres has been expanding rapidly due to increasing digital usage emerging from distributed workforce, growing data security concerns and business disruptions. Banking and financial services are adopting hybrid options to meet digital growth. Home-grown video and gaming platforms in midst of robust user growth are also fuelling the demand.

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