The US private equity group said on Wednesday that Carly will buy a 25 percent stake in Indian telecom giant Bharti Airtel for a data center for $ 235 million (about Rs 1,775 crore) as it accelerates digital services in India.
The acquisition, by an affiliate of Carlile, will give Airtel’s Nxtra data an enterprise valuation of approximately $ 1.2 billion (approximately Rs 9,066 crore), the companies said in a statement. Airtel will hold the remaining 75 percent stake in Nxtra.
The companies said that Nxtra, which is building several large data centers across India, would use the proceeds from the deal.
India is seeing an increase in demand for data centers as more businesses opt for cloud computing, and consumer demand for digital services such as smartphone entertainment increases, he said.
Cloud and entertainment services represent the next revenue frontier for traditional telecom carriers like Airtel, as voice and data rates in India are among the cheapest in the world.
Airtel’s local rival Jio, controlled by billionaire Mukesh Ambani, has a cloud tie-up with Microsoft, under which it will build data centers hosted on Microsoft’s Azure cloud.
Gopal Vittal, MD and CEO (India and South Asia), Bharti Airtel commented: “At Airtel, we have built a strong data center portfolio that is ready and scalable for the future. For us, our customers’ security and data privacy requirements are our top priorities, which we have established as a key differentiator for our mobile data offerings. Rapid digitization has opened up massive growth opportunities for data centers in India and we plan to accelerate our investment to become a major player in this segment. We are delighted to see Carlyle as a strategic partner in this exciting journey, especially given his experience in the industry, and look forward to working with him. “
Neeraj Bhardwaj, managing director of the advisory team at Carlyle Asia Partners, commented: “India has become one of the world’s largest markets for digital services. Airtel, with its proven track record of solid execution and customer focus, is well positioned to leverage the potential growth of data centers in India. We look forward to collaborating with Airtel to unlock the full potential of Nxtra. “
© Thomson Reuters 2020