Data centres, broadband kiosks seen positive for telcos

MUMBAI: The setting up of broadband kiosks and state-wide area networks and data centres announced by the Finance Minister, P Chidambaram on Friday is expected to benefit the telecom sector, analysts and industry players said.

"This is of direct benefit to the telecom sector," said Sourabh Kaushal, industry manager, Frost & Sullivan. "Looking at the potential this is miniscule but is definitely a move in the right direction," he added.

The government is expected to set up these centres through telecom companies and other vendors. It would lead to a huge potential in terms of infrastructure management services, said Jagdish Mitra, CEO of CanvasM a joint venture firm promoted by Tech Mahindra Ltd and Motorola.

Data centres are sites which host servers for companies holding and managing their data for them. In India, companies like Reliance Communications and Bharti Airtel, Tulip IT Services provide data centre services.

The finance minister announced setting up 100,000 broadband rural kiosks at 750 million rupees, state wide area networks for Rs 4.75 billion and state data centres for Rs 2.75 billion.

Shares in Reliance Communications were down 1.9 percent at Rs 573 in the after hitting a high of Rs 585 during the sessions. Shares in Bharti were down 1.9 percent at Rs 828.50 in a weak Mumbai market after opening at 840 rupees which was also the high for the day. Shares in Tulip were up 2.65 percent at Rs 1025 after hitting an all-time high of 1033 rupees in the Mumbai market.