The Carlyle Group, global private equity firm will buy a 25% stake in Nxtra, the data center arm of Indian telecom giant Bharti Airtel Ltd for $235 million.
The transaction carried out through a Carlyle affiliate will give Nxtra Data Ltd an enterprise valuation close to $1.2 billion. Airtel will continue to hold the remaining 75% stake in the firm. The procurement will allow the investment firm to enter a rapidly growing Indian market of digital services. Nxtra, which builds multiple large data centers across India, will utilize the income from the scale-up its infrastructure.
As more businesses in India move towards cloud-based solutions the country is witnessing a surge in demand for data centers while the demand for digital services such as smartphone entertainment continues to grow from consumers.
Value-added solutions like cloud and entertainment services are expected to be the next revenue segment for established telecom carriers like Airtel, Vodafone-Idea as voice and data rates in India remain the cheapest in the world.
Jio, controlled by billionaire Mukesh Ambani has entered into a tie-up with Microsoft, under which tech giant will build data centers hosted on Microsoft’s Azure cloud platform.