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With 14 Captive Data Centers, RJio Turns Outsourcing Down

Reliance Jio Infocomm is setting up 14 data centers across the country, according to latest media reports. A Live Mint report further says that the company would be setting up data centers in Jamnagar, Navi Mumbai, Mauda near Nagpur and in the National Capital Region. 

The number of data centers is significant but what is probably more significant is that the company has decided to set up the data centers itself. Yes, it is not unheard of and some telcos have set up their own data centers in the past. Reliance Jio’s arch rival Bharti Airtel has outsourced its data center operations to IBM. On the other hand, Vodafone India has just two data centers, one in Bangalore and another in Pune. Reliance Communications, however, owns its data centers while BSNL has a deal with Dimension Data for the same. 

But why would RJio, which has been on an infrastructure-sharing signing spree with most of the providers in the country, decide to set up its own data centers across the country? The company has signed infrastructure sharing agreements with Reliance Communications, Bharti Airtel, Viom Networks, Tower Vision, Bharat Sanchar Nigam Limited and Ascend Towers. 

“This clearly signals that data centers are going to be at the center of their strategy and they would like to have complete control and visibility of their performances. These data centers could play a key role in delivery of value-added services and captive content that RJio is building up inorganically,” says Deepak Kumar, Founder Analyst at 

Talking of content deliveries, these data centers could be utilized to offer direct-to-home television, video-on-demand and various other services. Another indication is that the company might have decided to focus on the enterprise segment in a big way. 

Reliance Jio’s move to set up its own data centers might signal another trend of moving away from outsourcing. Pioneering by Bharti Airtel about a decade ago, outsourcing of non-core areas once led to a dramatic reduction in tariffs. However, when the Bharti-IBM deal was renewed recently, it was rendered less exhaustive. Clearly, in a data-led era, the telcos feel the need to be in greater control of their IT assets. “The new model offers Airtel greater flexibility to scale services and adapt in real-time to changing market dynamics and offer a differentiated customer experience leveraging IBM’s industry solutions and global experience,” an Airtel release had said.

—Gagandeep Sodhi, Editor, Light Reading India 

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