Bharti Airtel continues data centre "expansion spree" with £200m Hyderabad investment

Bharti Airtel is set to invest £200 million in a new data centre in India, its biggest investment since it began construction of a data centre in Kolkata in November 2022.

The company revealed at Davos on 18 January that it’s set to invest ₹2,000 crore (£200 million) in a large hyperscale data centre in Hyderabad, as reported by The Economic Times. It will have a 60 MW capacity and is expected to be completed in five to seven years.

Bharti Airtel will make the capital investment through Nxtra Data Centers, its data centre arm that has more than ten large data centres and 120 edge data centres across the country.

“I think it is inevitable that Bharti Airtel is going to want to attract cloud hosting organisations as they constitute the lion's share of DC deals globally,” Tiny Haynes, principal edge computing infrastructure and services analyst, at 451 Research, part of S&P Global Market Intelligence, told IT Pro.

“India is also promoting investment in sovereign cloud hosting organisations, although it does not forbid data transfer to other countries so long as there is consent and adequate security measures in place. Being a telco, they will be in a strong position to offer well-connected cloud hosting services sitting on their network backbone.”

"I am very happy to see Airtel-Nxtra Data Centers invest in Telangana. Hyderabad is now the hub for hyperscale data centres in India and Airtel's investment adds to the pace we look to keep up,” said K T Rama Rao, minister for IT and industries at the state of Telangana.

Sunil Bharti Mittal, founder and chairman of Bharti Airtel said: "This is one of our biggest greenfield data centre projects in India and we are happy to be working with Telangana".

Data centre "expansion spree"

Nxtra Data Centers, Bharti Airtel’s subsidiary focused on building data centres, started constructing a new data centre in Kolkata in November 2022. This was valued at ₹600 crore (£5.9 million) and is expected to serve the east and northeast regions of the country. The facility, with 25 MW of capacity, is set to be operational by 2024.

The data centre arm revealed in November 2022 that it was set to embark on an “expansion spree” and spend over ₹5,000 crore (£498 million) over the next four years to triple its capacity to over 400 MW.

Global investment firm Carlyle Group announced in 2020 it would invest $235 million (£190 million) into Nxtra, a deal which took two years to officially complete in June 2022, giving the firm 24% ownership of the data centre company.

“India is witnessing a considerable surge in demand for secure data centres as businesses undertake digital transformation and consumer demand for digital services continues to increase,” Carlyle Group said when it made its initial investment.

“The expansion of hyperscalers across the region following the government’s directive on data localisation is propelling a lot of this demand, with other market drivers including the growth in user data and increase in cloud penetration.”

Bharti Airtel’s move to Telangana follows in the footsteps of Microsoft which announced in March 2022 it would establish a fourth data centre region in Hyderabad as well.

The new region joined the company’s existing ones in Pune, Mumbai, and Chennai. Microsoft tapped Telangana as it called it a “challenger” to the country’s IT sector thanks to a 7% increase in software exports in 2021.

"Data consumption in India is rising at an exponential rate primarily on the back of cloud adoption, digital payments, data localisation, and adoption of 5G Networks," said Arif Khan, India sales director at Colt Data Centre Services, to IT Pro.

"Therefore all segments, specifically hyperscale, enterprise, and consumers are demanding a reliable data and network infrastructure which makes India an attractive market for investments."