Data centers are the new in-demand real estate asset class in India and investments are on the rise. Apart from ‘Big Tech’ companies such as Amazon, Google, Microsoft and Oracle now larger infrastructure players such as well as giant investment firms and pension funds are queuing up to invest in the country.
According to an estimate by Knight Frank India, 80% of incremental co-location capacity is expected to be claimed by hyperscalers. NTT had been present in the country for more than two decades through its various subsidiaries NTT Communications, Netmagic and Dimension Data.
It integrated these under NTT Ltd. as part of its global effort to consolidate its businesses outside
Japan. In India, it has committed to invest around US$2 billion into the building of information and communications infrastructure by 2025-26. This huge investment will see NTT building new data centers parks, submarine cable landing stations, solar power plants, and enhancing cloud computing capacity in the country.
NTT has already invested over $800 million in the country into the ICT infrastructure. Shekhar Sharma, CEO of NTT Global Data Centers & Cloud Infrastructure India points out that, in 2022, NTT launched its new hyperscale data center campus in Navi Mumbai with NAV1A.
The company is also exploring an option of setting up its first Edge data center in Kolkata. For this project it has secured 7.5 acres of land at “Silicon Valley” in New Town, where the data center campus will be built in phases.
As part of its roadmap for edge data centers, NTT has identified a dozen tier 2 cities across the country and is exploring sites that will be suited to edge data center facilities. Additionally, NTT also provides locally interconnected data centers, with a cloud on-ramp to connect data and workloads on physical and virtual infrastructure.
These varied and large-scale investments have made NTT the largest data center player with an operational capacity of more than 2.1 million sq. ft. with over 230 MW of operational load across cities like Mumbai, Bangalore, Chennai, and Delhi/NCR. It is also making rapid progress on its upcoming data centers and expects to add another 2.5 million sq. ft. with over 280 MW load within the next two years, taking it to more than double its current capacity, stated Sharma.
India is one of the fastest-growing data center markets in the world today, making it a prominent focus for NTT Ltd.’s global business. In the wake of the pandemic, and the recent initiatives by the Government of India, especially policies regarding data localization, and digitization of services across different verticals, all have resulted in a rise in demand for data centers, cloud, remote-
working and cyber security products and services.
NTT has invested USD 2 billion to ensure access to world-class, end-to-end infrastructure for India’s digital-first economy and this launch in Navi Mumbai is another step in that direction.
Using Renewable Energy (RE) in data centers
Data centers are considered to be energy guzzlers and some global estimates have pointed out that 2 percent of global energy consumption is used up by data centers. With many countries across the world committing to eliminating fossil fuel usage over a period of time, data centers are also looking to go green.
As the environmental crisis becomes an urgent priority globally, both governments and businesses are under pressure to take actions that slow climate change. The case for organizations to prioritize people and the planet alongside profit is gaining momentum, and a collaborative effort is required to stem carbon emissions, according to Sharma.
To keep in touch with its sustainability goals, NTT India has announced its intention to access more power from renewable energy sources. By 2030, NTT has committed achieve net zero. The company is on track to be carbon neutral across its value chain by 2040. Furthermore, it plans to install 350 MW of solar energy and already has around 100 MW of installed solar power in
Maharashtra.
What’s driving DC adoption?
India currently accounts for Facebook’s largest national user base in the world. Additionally, the country has 726 million wireless internet subscribers, the second-highest in the world. Total data traffic is expected to triple from the current 7 exabytes per month to 21 exabytes per month by 2025.
Average traffic per smartphone is expected to nearly double to 25 GB per month by 2025. 410 million additional smartphone users are projected in India by 2025. Some of the other growth factors include the Infrastructure status which was granted to the data center industry in the FY23 budget.
This means that the industry will be able to attract long-term capital from investors such as sovereign wealth funds and pension funds. Another factor that could drive adoption is the soon to be tabled Personal Data Protection Bill. This would mean data storage requirements and a possibility of data stored within India-based data centers.
Also, 5G rollout will enable much higher bandwidth with increased connection density and lower latency. Edge networks and widespread use of IoT can be facilitated in a 5G world and this will generate huge amounts of data that will need enhanced data center capacities to process, furthering the development of the Indian data center industry.
