The data centre industry is expected to continue on a high-growth trajectory over the next few years, primarily led by the structural push of industry-friendly regulations, the government’s digital initiatives and investments, 5G roll-out, increasing use of cloud services and digital usage. Further, much of industry growth will happen around Mumbai and Chennai due to their business and infrastructure advantages, strategic location and cable landing stations, Airtel’s Nxtra and JLL said in a joint study.
Indian data centre industry stood at 499 MW IT load as of H1 2021 and is likely to record another strong year of demand growth with commensurate supply. Its capacity is expected to double to 1008 MW IT load by 2023.
Cloud, data centre and telecom players are adopting various strategies to capture a pie of digital growth. The study said cloud players, with self-build plans, were in the process of acquiring land parcels in new locations in line with their strategies. Several state governments have announced policies to provide incentives for establishing data centres. In the recent Budget, infrastructure status was given to the data centre industry. This will make it more cost-competitive with access to long -term funds and lower rates.
The report highlighted that while the country’s data centre future would largely depend on coastal cities like Mumbai and Chennai with easy access to cable landing stations, landlocked cities like Delhi NCR, Hyderabad, Bengaluru, Kolkata, and Pune will also be beneficiaries. NCR-Delhi has witnessed growth in recent years due to regulatory incentives and the potential for large demand from government organisations setting up public community cloud.
Pune has also shaped up as a redundancy option for Mumbai due to its proximity and better risk profile, it being landlocked.
On the other hand, Bengaluru has a higher proportion of on-premise data centres operated by in-house centres of global and IT/ITeS players.
Nxtra by Airtel has announced an investment of Rs 5,000 crore by 2025 to scale up its network of 11 large and 120 edge data centres, fully integrated with Airtel’s global submarine cable network and landing stations. The investment will also be used to build data centre parks in key metro cities. It will triple Nxtra by Airtel’s installed capacity to over 400 megawatt (MW). It has commissioned three captive solar power plants to source green energy and power its data centres and is committed to achieving 50% of its power requirements through renewable energy sources in the next 12 months.
