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Why telecom firms are investing up to 300m in data centres

Data centre revenue is expected to hit $7.5bn by 2019.

By Amy-Jo Crowley

Telecom firms are investing between $100m and $300m a year on ‘flexible’ data centre facilities as data centre generated revenue is expected to hit $7.5bn by 2019.

Research predicts that total data centre revenues will increase 28% a year over a five year period from $3.1bn in 2014, driven by efforts from telcos to host cloud services across multiple countries.

Budgets are currently being allocated on infrastructure used for internal networking, hosting and managed services and IP connectivity services among other IT services.

Specifically, key hosting and IT applications, such as server hosting, security and disaster recovery and back up services, are being virtualised and offered as on-demand services, using a variety of flat rate pricing models.

"The availability of new high quality new data centre stock will be critical in hosting new IT and cloud services for the telecoms provider," said Margrit Sessions, Managing Director of TCL.

"Increasingly telecom providers will have a simple choice to make, whether to invest in their own data centre stock to cater for the range of SLAs, power and performance required by their customers or whether to outsource to other data centre specialists if they are to stay in the game of offering their own cloud services."

Telcos are also investing in modular data centre designs, which allow new data centre space to be deployed on an incremental basis in line with customer demand.

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The TCL survey by Tariff Consultancy was based on 57 telecom providers around the world who have developed their own data centre infrastructure.

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