Bharti Airtel is accelerating investments in its data centre business through its subsidiary Nxtra, with plans to expand capacity to 1 gigawatt over the next three to four years, up from the current 120–130 megawatts. The expansion is aimed at capturing nearly 25% market share, compared with around 12% at present, as demand rises from cloud service providers, AI workloads, OTT platforms and enterprises undergoing digital transformation.
“Over the next three to four years, we believe this could scale to about 1 gigawatt, which could give us around 25% market share. We are committed to stepping up investments in data centres. While I cannot provide precise CAPEX guidance today, you will see increased investments in this segment,” Executive Vice Chairman Gopal Vittal told analysts during the company’s Q3 earnings call.
Airtel indicated that radio network spending has moderated following the peak phase of its 5G rollout. However, investments in homes, transport infrastructure and data centres are set to accelerate.
“One area where we believe we are underrepresented is data centres…data centre investments will step up meaningfully over the next two to three years. We will remain disciplined and ensure capital is allocated efficiently,” the company said.
Vittal noted that Airtel had incurred elevated capital expenditure of about Rs 34,000 crore during peak 5G rollout years.
“Radio CAPEX for new sites has slowed as coverage is largely complete. However, transport and fiber investments will continue. Over time, as 5G device penetration increases — currently nearly 90% of smartphones shipped are 5G-ready — spectrum refarming will also require investments,” he added.
Managing Director and CEO Shashwat Sharma said India’s data centre market is expanding rapidly due to data localisation norms, rising cloud adoption and AI-driven compute intensity.
“Airtel is investing not just in capacity expansion but also in strengthening data centre-to-data centre connectivity, low-latency fiber networks and subsea cable integration — creating a tightly integrated digital infrastructure stack,” Sharma said.
Responding to an analyst query on the impact of government incentives for cloud providers, Vittal said,
“It’s early days, but we think this will certainly fuel demand for data centres. With the availability of land and green power — most of our data centres today already have maximum use of green power — we do think that we have a role to play, given our heft and capital that we can allocate towards this, and the deep relationships we have with customers around the world.”
“We are certainly going to pursue this and find ways by which we can step up our data centre business. That is going to be a big area of focus for the business,” he added.
Beyond data centres, Airtel is also evaluating growth opportunities in cloud services, financial services and B2B adjacencies.
“However, we believe there remains a significant growth opportunity in the market, and we are focused on deploying capital toward growth rather than returning it at this stage,” Vittal said.
Airtel’s cloud business has gained momentum, with over 16 deals signed and more than 300 customer discussions underway across sectors such as BFSI and manufacturing.
“We’ve already made a reasonable investment. We are committed to dramatically stepping up investments if needed...there are over 116 features required for you to be a very competitive cloud. We have built most of those features,” Sharma said.
Airtel is also pursuing certification to operate as a sovereign cloud provider.
“We think geopolitical implications playing out across the world will lead to more and more need for data to be hosted in India with the right jurisdiction. There’s an opportunity for a strong sovereign play here, and from our perspective, we will do what we need to do to make the investment,” he added.
The Sunil Mittal-led telco ended the quarter with 181 million 5G customers.
“Our share in 5G shipments continues to improve, and 5G handset penetration is rising. Today, over 90% of smartphones sold are 5G-enabled,” Sharma said.
On ARPU growth, the company will focus on feature phone–to–smartphone upgrades, prepaid–to–postpaid migration, data monetisation and international roaming, especially in the absence of tariff repair.
Addressing speculation around AI-driven changes in telecom network design, Vittal said,
“The thesis globally is that there could be some implications from AI, and performance or uplink strategy needs to be planned for in network design.”
However, he clarified,
“But it is too small at this point in time to make a meaningful impact, and this is not just in India — this is across the world. We’ve had many conversations with several telcos. It’s still not playing out yet.”
On Airtel’s recently launched Perplexity AI offer, Vittal said there has been strong initial traction.
“We’re not going to disclose exact numbers, but there has been a very significant uptake of customers,” he said, adding that
“in the first few days of launch, we saw it reaching a few million.”
The company sees monetisation potential through premium subscriptions.
“One of the revenue streams that can be driven out of this is adoption of a paid package on Perplexity, which will give us a revenue share.” He described the initiative as
“a sampling exercise that Perplexity was keen to do on the Airtel base, given the quality of the user.”