NTT to invest estimated USD 1.5 bln in data centres in India

New Delhi, January 23: Japanese tech major NTT on Thursday noted a significant part of its USD 7 billion global commitment for data centres business would be spent in India over the next four years. "India is the fastest growing region for NTT and a substantial amount of the USD 7 billion commitment will be invested here", Sharad Sanghi said.

 

 

"The company also feels that there will be margin compression issues for the data centres business in India as capacity supply goes up along with an increase in competition, NTT's country chief executive for global data centres and cloud infrastructure", Sanghi added. In the last few months, a string of corporates, including the Adani Group, Hiranandanis and Reliance Industries have announced investments in data centres, on the back of regulatory moves like data sovereignity which makes it incumbent upon financial institutions to house their data locally.

 

When asked how the USD 7 billion investment would be made, Sharad Sanghi said the overall investments would be spread across four regions that the company operates in. This would mean that more than USD 1.5 billion or nearly Rs 11,000 crore would come into India. The company, whose revenues have been growing at 30 per cent every year, is targeting to more than double its capacity in the next three years through the investments, he added.

 

NTT is confident of guarding its business and growing in the face of competition, he asserted, adding data centres is its core business and clients, who sign long-term contracts, partner with companies which are not into different businesses like power and realty. There will be a consolidation in the industry due to the dynamics and the smaller entities may find it difficult to survive, Sanghi said, making it clear that NTT does not look at mergers and acquisition as a strategy but may move in opportunistically for the buys.

 

He also made it clear that aggressive pricing may not work for companies, pointing out to two incidents of companies who tried getting business using this strategy going bust. NTT on Wednesday also announced the launch of an integrated division to look over the global data centre opportunity.