Stakeholders across the data centre domain have been playing an instrumental role in propelling the growth of the industry. Nxtra by Airtel is one such company that has been actively expanding its data centre footprint and investing in India’s ever-evolving digital ecosystem. In an interview with tele.net, Rajesh Tapadia, executive director and chief operating officer, Nxtra by Airtel, shares his views on the data centre industry’s highlights, the impact of 5G on the demand for data centres and the company’s key focus areas and strategies…
What were the key highlights in the data centre industry during 2022?
The past year has been a roller coaster ride, with unique challenges and a surge in data centre requirements from all business verticals due to rapid digital transformation initiatives. Some of the marquee highlights from the past year were:
- Roll-out of new supportive government policies around data centre construction and green energy, including the announcement of infrastructure status for data centres and energy storage systems.
- A continuous focus by the government and enterprises to build a digital-first ecosystem. Thus, all enterprises, big or small, are actively adopting the cloud ecosystem, leading to a large domestic co-location market.
- Roll-out of 5G for various industrial use cases with sub-10 ms latency, triggering the distributed architecture enabled by edge data centres across India.
- Entry of many new players in the Indian data centre market, resulting in large land transactions for data centre developments across the country.
All these factors have positioned India as a hub for data centres in the APAC region.
How will the grant of infrastructure status to data centres impact the Indian industry? In your view, what are some critical policy gaps that still remain?
Establishing a data centre is capex intensive, which is a strong barrier for many data centre companies entering the industry. The grant of infrastructure status by the government in the previous year’s union budget enabled quick access to attractive long-term funding at lower costs not only from Indian financial institutions but also from international lenders, allowing providers to accelerate their geographical expansion strategies. The Indian government and various state governments are revising their data centre policies to support the infrastructural growth of data centres in India through tax subsidies. Under a national policy framework for data centres, the IT ministry intends to provide up to Rs 150 billion as incentives. Also, the Ministry of Power has recently released the Green Open Access Regulations, 2022, allowing locations with a connected load of 100 kW and above to source green power. This will enable edge data centres to adopt affordable and reliable renewable energy as their primary power source.
All these policies will enable India to unlock its potential as a regional data centre hub. The industry will only request a single-window clearance mechanism for faster clearances of pre- and post-data centre construction to further accelerate the pace of the deployment process.
How will the roll-out of 5G impact the demand for data centres? What will be other demand drivers in the coming years?
The roll-out of 5G networks and new emerging technologies will accelerate India’s connected economy. It will fast-track the business adoption of new-age technologies like internet of things (IoT) and augmented reality (AR)/virtual reality (VR) to enhance efficiencies and improve customer experiences. It will also enable very high data consumption across video, gaming, real-time applications, etc., resulting in exponential demand for secure, scalable and reliable data centres connected to a robust network to seamlessly store and process this massive digital data.
In addition to the 5G network, growing digitalisation, internet penetration coupled with IoT-powered smart devices, video streaming services, hybrid work style and cloud migration are a few growth drivers. The increasing exploration of AR/ VR, autonomous vehicles, factory automation and the demand for hyperscale and edge data centre applications will continue to thrive over the next decade.
What is your outlook for the Indian data centre industry in 2023?
We are very optimistic about the outlook for the industry especially keeping in mind the developments in 2022. India has the capability to become a regional data centre hub, given the country’s strategic location in South Asia, the availability of submarine cable landing infrastructure, land supply, vast green energy resources, skilled manpower and favourable regulations. This, coupled with local data storage regulations, will lead India to witness a strong demand for reliable and scalable data centre infrastructure. Technology advancements such as cloud adoption, IoT devices, AR/VR, data localisation, 5G roll-out etc., will further accentuate the hyperscale and edge story in 2023 and bring solid momentum to the fore.
What will be your key focus areas and strategies for the year?
We anticipate major investments being committed by both domestic and global players in addition to Nxtra by Airtel, which is doubling its investments.
The year 2023 is going to be exciting on many fronts. It will be a “year of build” for Nxtra by Airtel as we continue to accelerate our development of a hyperscale data centre park in Mumbai with a total capacity of 85 MW and 7,500 racks. In addition, we have initiated the construction of our data centre parks in Pune and Kolkata along with the purchase of lands in Bengaluru, Hyderabad and Noida. This will further strengthen our position as the largest network of interconnected data centres in India. Currently, we operate 12 large and 120 edge data centres in India. The investment commitment of Rs 50 billion in the next few years will scale up our installed capacity by 3x to over 400 MW to meet the surge in demand and help India become a digital-first economy.
Sustainability will continue to be a significant focus given the large energy requirements of data centres. We are aggressively scaling up the use of green energy in our data centres and aim to reach 50 per cent of the power requirements through renewable sources in the next few months. We aim to reach net-zero emissions by 2031. Recently, we became the first data centre company in India to install a hydrogen-ready fuel cell-based captive power plant to provide clean energy to data centres. The Green Open Access Regulation, 2022 will further help us increase our renewable energy footprint in edge sites and achieve the net-zero target in a promising manner.