Why Airtel is betting big on data centres

With the data consumption on a rise, data centres and cloud companies are sensing a big opportunity. Airtel, which claims to have the largest network of data centres in the country, is planning to triple its capacity to over 400 MW (megawatt) by 2025. The company operates 10 large data centres and 120 smaller ones (called edge data centres) covering 70 cities. It will add another seven centres over the next four years with an investment of Rs 5,000 crore.
By opening more data centres in different cities, Airtel says its customers will benefit as they would, in turn, move closer to their customers and offer low-latency services.

So why is Airtel expanding this business? The reasons are manifold. Firstly, the size of the data centre market in India is expected to touch $4 billion in the next 3-4 years. Then, technologies like IoT (internet of things) and 5G are going to fuel data demand, and as a result, more data centres will be required. Over the past few years, the policy changes have also helped entities like Airtel since there's a mandatory requirement for in-country data storage.

Also read: Airtel to pump in Rs 5,000 cr to scale up data centre biz

Data centres are huge power guzzlers. There's a concerted efforts to reduce dependence on traditional power sources by data centre companies. Airtel, for instance, is aiming to meet over 50 per cent of the power requirements at its large data centres through renewable sources. There's an added advantage of sustainability efforts. Airtel thinks that a large number of neighbouring countries in Asia Pacific region will not be able to produce enough power from renewable sources, and they could use Indian data centres to cater to the demand.

"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. 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," said Ajay Chitkara, Director and CEO, Airtel Business in a statement.

Nxtra serves over 400 customers across a wide portfolio of customers including hyperscalers, banks, government, start-ups, cloud and internet companies. At present, Mumbai is the largest market for data centres controlling nearly 40 per cent of the market. Airtel believes that demand for data centres is going to be higher than supply in the coming years, so despite higher competition, the pricing would not be a challenge.

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Also read: CRISIL upgrades Bharti Airtel’s long-term rating to 'AA+/stable'; short-term rating reaffirmed