By Sankalp Phartiyal
NEW DELHI (Reuters) - Telecoms group Bharti Airtel said on Thursday it will invest 50 billion rupees ($673 million) in expanding its data centre business to meet customer demand in and around India.
Airtel Business chief executive Ajay Chitkara said its Nxtra unit will make the investment by 2025, with plans to build a data centre economy across 80 Indian cities, adding that the move will triple its installed capacity to more than 400 MW.
"There is a huge potential and huge demand (for data centres) which is expected in the next three to four years time," Chitkara told a virtual news conference.
Nxtra currently runs 10 large and 120 edge data centres, or smaller data processing facilities, across India and the expansion is part of a strategy by telcos to add new revenue streams to their business and lure enterprise clients who typically offer higher margins.
The business plan also comes at a time when traditional voice services face new competition from free calls on apps such as Facebook (NASDAQ:FB)'s WhatsApp and Signal.
An affiliate of U.S. private equity group Carlyle last year bought a 25% stake in Nxtra. Airtel still owns 75%.
Public cloud spending in India is expected to exceed $12 billion by 2025, Naveen Mishra of research firm Gartner (NYSE:IT) said.
Airtel's rival Reliance Jio, which is controlled by Indian billionaire Mukesh Ambani, forged an alliance with Microsoft (NASDAQ:MSFT) in 2019 to build data centres across India and this year partnered with Google (NASDAQ:GOOGL) to boost its enterprise and consumer offerings as it plans to launch 5G services.
Separately, Airtel said Nxtra will increase the use of green energy for its data centres, aiming to source 50% of its power requirements from renewable sources.