Reliance Communications To Pump Rs 1,000 Crore For Internet Data Centers

[Arun 795]

Business Standard

Mumbai April 28, 2008

Reliance Communications (RCom) is setting up seven international data centres (IDC) in the country spread over 1.4 million square feet with an investment of around Rs 800-1,000 crore.

The move will help the company to emerge as one of the top-three third party data centre providers in the world.

The investment is also one of the largest as it excludes the real estate cost. The company intends to set up the IDCs on owned as well as leased space.

"RCom has finalised the locations to set up the seven IDCs, which are expected to commence operations by the end of this financial year. This will increase the company's total number of data centres to 13 even as additional data centres are being planned," sources close to the development said.

The company will build two of the world's largest data centres ? one at the Dhirubhai Ambani Knowledge Centre (its headquarters) in Navi Mumbai and another at Whitefield, Bangalore ? spread across 400,000 square feet each.

"The other data centres would come up in Mumbai, New Delhi, Hyderabad, Bangalore and Chennai," he said.

"There are expansion plans in the offing. However, we cannot comment on the specifics of the projects," a RCom spokesperson said when contacted.

At present, the company has six data centres with over 500,000 square feet of space in India and is the largest data centre provider in India with over 60 per cent market share and around 700 customers.

RCom's clientele includes multinational companies like Yahoo!, Google and Deutsche Bank, apart from banking financial sector and insurance (BFSI), media and entertainment, manufacturing and services firms.

Tata Communications (formerly Videsh Sanchar Nigam), Bharti group and Sify are the other data centre providers in the country. IBM and Sun are two of the largest data centre providers in the world.

According to an industry analyst, the company's recent acquisition of a 90 per cent stake in British WiMax major eWave World and the planned expansion of managed hosting, co-location, system integration and management services for corporates across the world would require additional IDC space.

India is emerging as the next hot destination for IDCs, due to cost arbitration, skilled manpower and abundant international bandwidth availability.

On completion of the new data centres, RCom expects to serve more than 2,500 corporate customers with revenue realisations of around Rs 1,200 crore within the first year of commercial launch.

At present, RCom has over 2.6 lakh square feet capacity spread over 6 locations in the country.