Data centre capacity in Malaysia, Indonesia and India is expected to increase at a compound annual growth rate (CAGR) of 10-25 per cent in the next five years, according to 451 Research, a unit of S&P Global Market Intelligence. A rising online penetration rate, localised content and young population can be attributed towards this favorable outcome. Enterprises digitalising their operations and migrating to cloud is also a key factor. Singapore is expected to grow at a modest pace owing to its established market with constraints on land and power supply.

Additionally, the report stated that regional telecom operators, real estate companies and international data centre providers are looking forward to being a part of the South and Southeast Asia- market, in order to diversify revenue sources and assets and retain customers. The telcos are looking at investments in data centres in South Asia and Southeast Asia as a natural extension of their core businesses, to be used for their connectivity infrastructure and experience in running capital-intensive businesses in a regulated environment.

Further, the report added that data centres also offer monetisation opportunities if telcos plan on recycling their capital and reinvesting in other emerging opportunities.