Social media giant Meta Platforms is reportedly considering establishing its inaugural data center in India to cater to the surging demand for its short video feature, Reels, in the country, according to a report by Moneycontrol citing insider sources. The feasibility study for the project is expected to commence in the first quarter of 2024.
The proposed data center is likely to be of modest scale, focusing on caching, with an estimated capacity of 10-20 megawatts, as per the report. While the location and investment details remain undisclosed, experts suggest that Meta may invest between ₹500-1,200 crore in the project, considering that the average cost for setting up a Tier-4 data center in India ranges from ₹50-60 crore.
Experts believe that establishing a local data center in India could enhance Meta’s ability to deliver an enhanced user experience, especially as the company gears up to introduce a series of generative artificial intelligence (AI) features across its products.
Instagram Reels, Meta’s short video platform, gained prominence in India following the ban on TikTok by the Indian government in July 2020, citing national security concerns. With India being the world’s second-largest internet market, it has become a critical battleground for platforms like Instagram to compete with TikTok and dominate the global short video space.
According to data from Sensor Tower, Instagram and TikTok have fiercely vied for the top position in terms of total global downloads in 2023, with each platform securing the top spot for two quarters during the year. The popularity of Instagram in India has been significantly boosted by the absence of TikTok, with Instagram Reels effectively filling the void left by its ban, providing users with a comparable platform for creating and sharing short-form videos.
In 2023, Instagram emerged as the most downloaded Android app, with 270.3 million app installs, as per Sensor Tower’s report released in December of the same year. Capitalizing on the success of Instagram Reels in the Indian market, Meta also introduced Reels on Facebook in 2022, allowing users to create and view video clips from creators across both platforms.
Currently, Meta operates 22 data centers worldwide, with its sole data center in the Asia Pacific region located in Singapore. With the burgeoning demand for data services in India, driven by exponential growth in data consumption and an evolving regulatory landscape, the country’s data center industry is poised for significant expansion. A report by CII-Colliers released in October 2023 projects that the data center industry in India is expected to attract $10 billion in investment over the next three years, representing a 40% growth compared to the preceding three years.
In summary, Meta’s potential establishment of its first data center in India reflects the company’s strategic efforts to address the growing demand for digital services in one of the world’s largest internet markets. This move not only underscores Meta’s commitment to enhancing user experiences but also aligns with broader industry trends driving investment in India’s data center infrastructure.
