Data Center Battle: Reliance, Adani, and Airtel Compete for Dominance in Telecom's Next Frontier

In a race for supremacy in the burgeoning data center industry, Reliance, Adani, and Bharti Airtel are gearing up for intense competition as they expand their foothold in this critical sector.

Reliance, led by Mukesh Ambani, has recently unveiled a strategic collaboration with Canadian firm Brookfield to establish a cutting-edge data center in Chennai, setting the stage for a clash with industry counterparts Adani and Airtel.

Ambani, speaking at the Tamil Nadu Global Investors Meet, highlighted Reliance's foray into renewable energy and green hydrogen, traditionally dominated by Gautam Adani's enterprises. Ambani announced, "Reliance has partnered with Canada's Brookfield Asset Management and US-based Digital Realty to set up a state-of-the-art data center, slated to open next week."

While Reliance is making strides in this arena, both Adani Group and Bharti Airtel have already established themselves with significant investments in data centers.

Reliance, Adani, and Airtel's Data Center Landscape: Reliance's entry last year, with a ₹378 crore investment in a joint venture alongside Brookfield and Digital Realty, has positioned all three companies with an equal 33% stake in a venture that will unveil a 20-megawatt greenfield data center in Chennai, as reported by the Times of India.

Adani Group, on the other hand, has made substantial inroads through a 50:50 joint venture with EdgeConneX (ECX), raising $213 million for a data center project in Chennai. The ambitious goal for Adani Enterprises is to become one of the top three data processing companies by 2030.

Bharti Airtel's data center arm, Nxtra, is also making significant progress. Nxtra plans to acquire 23,000 MWh of renewable energy by the fourth quarter of FY24 and aims to secure its position as India's leading data processing company.

Driving Forces and Future Prospects: The expansion into data centers by these telecom giants is fueled by the rapid technological advancements and digitalization in India. The imminent rollout of 5G spectrum for internet providers is expected to further boost the demand for data centers in the country.

In this endeavor, Indian companies find themselves in fierce competition with global tech giants like Google, Amazon, and Microsoft, which have already initiated the establishment of data centers within India. According to a report by Avendus Capital, the data center market in India is projected to grow by 40% annually, reaching $5 billion in investments by 2025. The race for dominance in this transformative sector is well underway.