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India a high-growth, stable market attracting big investments: NTT | Mint

NEW DELHI : Data center and IT infrastructure provider NTT is massively expanding its presence in India, which it considers to be both geopolitically stable and the world’s fastest growing data center market. 

The company has eight new data centres under construction in India, which would add to its 14 existing centres in the country.

India also offers a large pool of talent and revenue growth opportunity, which will further expand with the advent of AI and GenAI, NTT Global Data Centers chief executive and president Doug Adams said while launching the company’s first data centre in Noida, Uttar Pradesh on Thursday. 

“In India, historically, we’ve seen about 29% growth. We expect to see much higher growth as AI and other technology starts to come to this market,” he said. “One of the reasons we are bullish, (and why) we have so many employees within India, is that it is stable. It does have a high concentration of very talented, well-educated individuals, and over the last two years we have spent a lot of money from NTT into this market because of the stability.”

In 2022, NTT announced investments of about $2 billion over five years towards building data centres in India. Last year, it committed to invest $11 billion towards expanding or upgrading its data centres globally, till 2027. 

The Tokyo, Japan-headquartered telecom giant has a total capacity of 268 MW across 18 centres in Delhi-NCR, Mumbai, Chennai and Bengaluru, spanning 3.1 million sq.ft. The new data centres and expansion of the 14 existing centres will add 525 MW capacity to the existing power demand.   

With AI and GenAI coming to fore and being put in use by enterprises, the compute capacity required will rise exponentially, leading to massive growth in data centre requirements, especially in markets like India and the US, Adams said.  

According to report by real estate consulting firm CBRE South Asia, India’s data centre capacity is expected to exceed 1,300 MW by the end of 2024, from 880 MW as of June 2023, with nearly 500 MW currently under construction. 

Mumbai, Chennai and Bengaluru will collectively dominate the data centre stock with an 80% share by the end of 2024. CBRE said India’s data centre industry was witnessing continuous growth owing to rapid digitalisation, enhanced tech infrastructure, and the inclusion of advanced technologies such as 5G, AI, blockchain and cloud computing.  

Financial services firm Avendus Capital, in a report in June, pegged $23 billion in investments towards capital expenditure on data centers in India over the next 10 years. This, it said, would be driven by an exponential increase in data consumption, storage, the government’s thrust on data localisation, and the need for high bandwidth following the launch of 5G services. 

NTT is also looking at a higher level of local sourcing under the ‘Make in India’ program, as this allows for lower cost of manufacturing and closer availability of IT products such as servers that are required for expanding its data centre capacities.   

“Earlier we had to source from different countries. We are trying to do most of the procurement through the ‘Make in India’ concept,” said Shekhar Sharma, chief executive and managing director of NTT Global Data Centre India. 

“We have a lot of companies from the US, the UK and the Middle East that have set up their factories here. It is primarily due to cost and predictability, because building in India is much cheaper than outside, and secondly, due to the (stable) geopolitical situation,” he said.

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Published: 11 Jan 2024, 10:56 PM IST

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Michael Maren
Michael Maren
Former marine biologist who likes to spend as much time in the tropics as possible, due to a horrible time I once had in Alaska. Brrrr.

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