Report: Tata Mulling Sale of Global Data Center Business

Indian telecommunications giant Tata Communications may be considering a sale of its massive global data center business.

While it isn’t as widely known as western data center giants like Equinix or Interxion, Tata is one of the world’s largest data center providers. The company operates more than 1 million square feet of data center space in more than 40 locations around the world, including North America, Europe, and Asia-Pacific.

It has retained Jefferies, a US-based investment banking firm, to help it find the best buyer, The Times of India reported, citing anonymous sources. Tata’s data center business is worth about $500 million, according to the report.

A lot of data center assets have been changing hands recently, as data center providers try to put themselves in the best position to serve today’s market. There’s reportedly a lot of demand for data center services at global scale from cloud service providers and digital-media companies, and companies including Equinix, NTT, and Digital Realty have been making big acquisitions to increase their footprint.

Japanese telco NTT is buying German data center provider e-shelter in a €742-million deal announced in March; Equinix announced in May a $3.6-billion takeover of the European giant TelecityGroup; Digital said this month it will acquire US national player Telx for $1.9 billion.

Tata doesn’t break out financial results of its data center business separately, but its managed services unit, which includes data centers, mobility, unified communications, and other services, contributes about one-third of its annual revenue.