Airtel unit Nxtra to invest Rs 5,000 cr to expand data centre business

Plans to build seven hyper-scale data centres that will triple its capacities and help India become a regional hub for data centres

Bharti Airtel on Thursday announced that its subsidiary Nxtra will invest Rs 5,000 crore by 2025 to scale up its data centre business.
 
Nxtra By Airtel plans to build seven hyperscale data centres that will treble its capacities, attract business from neighbouring countries, and help India become a regional hub for data centres.
  
The investment will be made through a mix of internal accruals, equity infusion, and debt, said Ajay Chitkara, director and chief executive officer, Airtel Business. Private equity firm Carlyle holds a 25 per cent stake in Nxtra Data.
 
The expansion has been announced amid growing digital penetration and adoption of Cloud. Introduction of 5G services is expected to increase data consumption further and give a boost to the business. Currently, Airtel has 10 large data centres and 120 small data centres with coverage in 70 cities.
 
Chitkara said the company has around 400 Indian and global customers, and its revenue has trebled since 2017-18.
 
“Our experience of operating secure data centres, deep brand trust in the enterprise segment, and the ability to deliver end-to-end digital transformation solutions positions us well to serve the emerging requirements of India’s connected economy,” he added. 
 
Data centres are power guzzlers and countries have taken various approaches to regulate their growth. While Singapore has put a temporary pause on new data centres, certain political parties in Ireland are seeking a ban on all future data centres.

Airtel said it is scaling up the use of green energy and aims to source 50 per cent of the power requirements of these centres through renewable sources as part of its overall greenhouse emission reduction targets. The company has commissioned captive solar power plants in Uttar Pradesh and Maharashtra and more are in the pipeline.
  
According to a report by real estate consultancy JLL, the Indian data centre industry is expected to grow more than double to 1,007 megawatt (Mw) by 2023, from its existing capacity of 447 Mw as of 2020 (data centre capacity is measured on the basis of power consumption).
  
Mumbai and Chennai are expected to drive 73 per cent of the sector’s total capacity-addition during 2021-23, while other cities like Hyderabad and Delhi-National Capital Region will emerge as the new hotspots, it said.
 
The central government is proposing incentives to target an investment of Rs 3 trillion in data centres in the country in the next five years. Several state governments, too, are unveiling policies to attract investments.