By Sankalp Phartiyal

NEW DELHI (Reuters) – Telecoms group Bharti Airtel said on Thursday it will invest 50 billion rupees ($673 million) in expanding its data centre business to meet customer demand in and around India.

Ajay Chitkara, chief executive of Airtel Business, said that its Nxtra unit would make the investment by 2025. The plan is to create a data center economy in 80 Indian cities. He also stated that this move will increase its capacity to over 400 MW.

Chitkara said that there is huge potential for data centers and a large demand in the coming three- to four years.

Nxtra has 10 and 120 large data centers, respectively, in India. The expansion of these data centres is part a strategy that telcos have implemented to increase their revenue and attract enterprise clients, who usually offer better margins.

This business plan comes as traditional voice services are being challenged by free calls via apps like Signal and WhatsApp (NASDAQ:).

Nxtra’s 25% share was bought by an affiliate of U.S. equity company Carlyle. Airtel still owns 75%.

Public cloud spending in India is expected to exceed $12 billion by 2025, Naveen Mishra of research firm Gartner (NYSE:) said.

Reliance Jio is the Indian billionaire Mukesh Ambani’s competitor. In 2019, it formed an alliance with Microsoft (NASDAQ.) to create data centers across India. This year, Airtel partnered with Google (NASDAQ.) to increase its consumer and enterprise offerings, as it prepares to launch 5G service.

Airtel stated separately that Nxtra will use more green energy in its data centres and aim to obtain 50% of its power from renewable sources.