The data centre segment in India, which has witnessed steady growth on the back of increasing digitisation, deeper smartphone penetration and cheaper internet, has drawn $396 million in investments between January and September 2020, according to a study.
The value makes up 40% of the total private equity and strategic investments -- approximately $977 million -- that the sector has attracted in the past 12 years, real estate services company Anarock said in a report titled Navigating the India Data Centre LifeCycle.
About $9.5 billion of the leveraged capital is in various stages of being announced, committed or waiting to be committed into Indian data centres through partnerships with local developers or infrastructure providers, it said.
For the report, the Mumbai-based company analysed under-construction data centre projects as well as the capital invested, committed and set to be committed in the industry.
India currently has 126 third-party co-location and hyperscale data centres, which are owned and operated by 53 players.
However, the cumulative capacity is highly concentrated among 12 key players -- CtrlS, Cyfuture, Esds, GPS Global, NxtGen, NxtraData, Reliance Communications, Sify, STTelemedia, WebWerks and Yotta. They operate 95% of the total IT power capacity in the country.
Over the next three years, the report said, India will see at least 28 new hyperscale data centres. These will be large facilities, covering a total of more than 16 million sq ft, with at least 1,400 MW of IT power capacity.
“While India has been seeing a massive digital thrust since 2014, the current government’s data localisation policy has paved the way for hyperscale data centres to handle the increasing data consumption,” Anuj Puri, chairman of Anarock, said.
“Hyperscale facilities have clear advantages over smaller colocation centres as they can cater to the huge domestic data warehousing demand creating operating efficiencies and thus, pass on cost benefits to their customers,” he said.
In addition to the number of new data centres and investments, the report also highlights that the revenues in this space have grown three-fold from $386 million in 2014 to $1.01 billion in 2019.
Based on these trends and the future launch of 5G, it expects the $3.6 billion worth industry to become a $19 billion opportunity in the next five-seven years.
The rollout of 5G, according to the report, will particularly increase data centre developments in tier 1 cities, while tier 2 cities will see a boost in smaller co-location facilities.
Among these, Mumbai and Chennai are expected to serve as data centre hubs, contributing 60% of all future capacity, owing to the presence of cost-efficient undersea cables. Delhi NCR and Hyderabad would follow, with an expected supply contribution of 33%.