ST Telemedia Buys Majority Stake In Tata’s Data Centre Business

The Asian data centre market has undergone a massive shift this week as Tata Communications offloaded 74 percent of its Indian and Singaporean data centre business to ST Telemedia.

ST Telemedia, one of Singapore’s largest communications companies, has bought the stake for $640 million (£439m) and marks the latest expansion of the company’s data centre operations.

Tata retains a 26 percent share of the business, which has 14 data centres in India and three in Singapore. All are located in what ST Telemedia describes as ‘key cities’, such as Delhi, Bangalore, and Mumbai.

Key cities

Customers of these data centres include e-commerce platforms, global multi-national companies, and some of Asia’s largest blue chip businesses. The deal marks the latest milestone in the expansion of STT GDC, ST Telemedia’s data centre business. Last June, it invested in a 49 percent stake in UK data centre provider Virtus.

“Since ST Telemedia’s initial investment in the data centre business in mid-2014, we have made remarkable progress in building a formidable data centre footprint internationally,” said ST Telemedia executive director Sio Tat Hiang.

“The latest addition of India to the STT GDC network will be a major impetus to advance the company’s ambition to be a significant global data centre service provider. We are pleased to partner with an established company like Tata Communications, to pursue opportunities in the growing data centre market.”

Growing market

Latest estimates from analyst house Gartner value the Indian data centre market at $2 billion (£1.3bn) by 2016, a 5.2 percent increase from last year.

This is thanks to a massive push towards cloud and IaaS workloads from small and medium businesses in the subcontinent, boosting spend on cloud storage.

“Within the Indian IT infrastructure market, server revenue is forecast to reach $698 million (£460m) in 2016, an increase of 5.3 percent over 2015. Enterprise networking will continue to be the biggest segment with revenue expected to touch $963 million (£635m) in 2016,“ said Aman Munglani, research director at Gartner.

“This segment will also be the fastest growing market, as spending is forecast to increase 5.9 percent in 2016. With increased focus on mobility and big data activities in India, software defined networking has the highest adoption rate amongst Indian enterprises.”

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