The social networking giant Meta Platforms is contemplating setting up its first data centre in India to meet the growing demand for its short video feature Reels in the world’s second-largest internet market, Moneycontrol reported Wednesday citing sources.
The report said the Facebook parent is likely to start a feasibility study of the project in the first quarter of 2024.
“Meta is evaluating deploying a small data centre. It could be a cache-focussed 10-20-megawatt data centre,” reported Moneycontrol quoting sources.
The report said Moneycontrol has not been able to determine the location and the amount Meta plans to invest in this initiative.
According to experts, the social media giant—which is planning to set up to 20 MW capacity centre— may invest ₹500-1,200 crore in the project as the average cost of setting up a Tier-4 data centre (highest quality with over 99.99% uptime) in India is around ₹50-60 crore.
The experts said a local data centre in India is likely to help the social media giant deliver an improved user experience to consumers at a time when Meta is looking to introduce a series of generative artificial intelligence (AI) features on its products.
Rise of Reels in India
It is important to note Instagram Reels were rolled out in India in July 2020 after the Indian government banned TikTok—the short video app owned by ByteDance across the country citing national security concerns—and the Indian consumers were scrambling for an alternative to fill the void.
India, the world’s second-largest internet market, has turned out to be a crucial market for Instagram in recent years to compete with rival TikTok to be the global leader in the short video space.
According to app intelligence firm Sensor Tower, TikTok and Instagram have intensely competed for the top spot in terms of total global downloads in 2023, each securing the spot for two quarters during the year.
“A pivotal factor contributing to Instagram’s popularity in India has been TikTok’s ban in the country in 2020. Instagram Reels has effectively filled the void left by the ban of TikTok, offering users a comparable platform for creating and sharing short-form videos,” Moneycontrol quoted Sensor Tower’s, app intelligence firm, report released in December 2023.
The report said, that in 2023, Instagram topped the list of most downloaded Android apps with 270.3 million app installs. To cash the Instagram Reel’s success story in the Indian market, Meta also rolled out Reels on Facebook in 2022, allowing users to create and watch video clips from creators.
Data Centre Market in India
The experts said a local data centre is likely to help the social media giant deliver an improved user experience to Indian consumers.
The social media giant currently has 22 data centres spread across the globe. However, the company’s only data centre in the Asia Pacific region is situated in Singapore.
According to a CII-Colliers report released in October 2023, the data centre industry in India is expected to attract $10 billion in investment within the next three years, registering a 40% growth from the last three years. This growth is driven by an exponential increase in data consumption and improving regulatory framework, the report added.
