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Private investment in data centres is on the rise in Bangladesh to serve the growing demand for storing, processing and managing digital data generated thanks to the boom in internet use and digitalisation of services.

Local players have channelled funds into setting up data centres while the sector is also attracting foreign investments.

Private, public and foreign entities have already invested or are in the middle of injecting more than Tk 5,200 crore, with half coming from overseas.

The exponential growth of data, driven by online services, e-commerce, and the Internet of Things, has created an urgent need for data storage and processing capabilities in Bangladesh.

According to industry people, organisations in various sectors, including banks, government agencies, and healthcare, education, and technology service providers, use data centres and cloud services, which enable data storage, processing, and scalability, and facilitate efficient operations and digital innovation.

Fiber@Home Ltd, the first nationwide telecommunication transmission network provider in Bangladesh, founded Felicity IDC Limited, which is building two data centres at the Bangabandhu Hi-Tech City in Gazipur's Kaliakoir and the Sheikh Hasina Software Technology Park in Jashore.

At the Kaliakoir's data centre, 250 racks have been set up with full operational capability and it is a highly accredited tier III centre.

"This demonstrates our commitment to the highest standard of quality, environmental management and information security," said Moynul Haque Siddiqui, chairman of Fiber@Home.

Some top banks are taking services from the centre.

Fiber@Home has invested more than Tk 275 crore and plans to put in another Tk 350 crore to Tk 400 crore in two data centres, which will have a total of 1,250 racks.

At a data centre, a rack is a vertical storage frame for servers and networking equipment, designed for efficient organisation and space optimisation.

Robi Axiata Ltd, the second-largest telecom network operator, has established a tier IV data centre in Jashore at an investment of around Tk 155 crore.

The tier classification system, developed by New York-based Uptime Institute, certifies sites for reliability and redundancy ranging from tier I to tier IV.

"Our data centre is strategically located outside the seismic-zone areas of the country to cater to the growing demand for such a facility," said Shahed Alam, chief corporate and regulatory officer of Robi Axiata.

"As the first privately owned tier IV data centre of the country, it will pave the way for private enterprises seeking enhanced security for their sensitive data."

Equipped with 300 racks with an initial investment of Tk 50 crore, DataHub Asia has set up a colocation and cloud data centre in Thakurgaon recently.

"With our robust infrastructure and strategic location, the facility is suited for various sectors, including banking, financial services, hosting, and manufacturing," said Md Shoroer Morshad Porag, CEO of DataHub Asia.

He said data localisation, the practice of storing data within a country's jurisdiction, has gained significant importance in recent years and Bangladesh should prioritise policy for that.

Dhaka Colo Limited ventured into the data centre business more than five years ago. It currently operates five centres in the capital, with one having 150 racks, in Chittagong with 50 racks, in Jashore with 50 racks, and in Khulna with 50 racks, all at an investment of Tk 100 crore.

"We are currently operating at a breakeven," said Kamal Hossain, managing director of Dhaka Colo.

He thinks it is important to address policy concerns since 90 percent of the data is stored outside the country, leading to an increased international bandwidth cost and latency.

According to industry people, although Bangladesh's data centre sector is attracting some foreign investments, it is low compared to peer economies.

Data centres in India have garnered significant attention from international investors and developers, partly due to favourable government policies.

Global technology companies such as Google, Microsoft and Amazon have begun the construction of data centres in India, which has received $10 billion in investments in the segment since 2020, propelled by surging data consumption and demand.

Yotta Data Services, an arm of Indian conglomerate Hiranandani Group, has announced that it is investing Tk 2,000 crore to build a tier IV data centre at the Bangabandhu Hi-Tech City.

"The construction work has already started," said GSM Jafarullah, managing director of the Bangladesh Hi-Tech Park Authority, recently.

Jatra International, which has attracted investment from an international company, is investing about Tk 800 crore in the park, according to the authority.

DataVolt, a Saudi Arabian data centre manufacturing and power generation giant, has recently unveiled plans to invest $100 million in establishing a cutting-edge data centre in Bangladesh, said the ICT Division.

The government has also set up two data centres.

The Bangladesh Computer Council built a data centre at the cost of about Tk 250 crore to store the data of government entities and sites.

In 2019, the government established the National Data Centre, the largest in Bangladesh, at the Bangabandhu Hi-Tech City at an investment of Tk 1,500 crore. Funded by China, it is run by Bangladesh Data Center Company Limited (BDCCL).

BDCCL and GenNext Technologies Limited earlier this year signed an agreement to set up Meghna Cloud, the country's first cloud data centre.

With $12.5 million in investment, the platform will provide cloud service infrastructure, including servers, storage and networking equipment, and associated software technology.

Sayeef Rahman, chief operating officer of Meghna Cloud, said Bangladesh's journey towards cloud is currently at a nascent stage.

"Apart from raising awareness, we need to create a service mindset with skilled tech resources. We should also be careful in catering to cyber security for these clouds."

Rahman thinks the government needs to step up its efforts for data sovereignty so that companies like Google, Facebook and Amazon localise data.

"If it is done, it will help us bring down the cost of internet."

He sought incentives from the government for building data centres in technology parks.

Electricity may be made available at an affordable rate while the land lease rate could be lower. Technology imports should be facilitated, he said.

According to Md Hasibur Rashid, director and chief marketing officer at Novocom, Bangladesh has a bright prospect in the data centre business.

"Once global content providers start to maintain more cache servers in Bangladesh to bring contents to local consumers, there will be more demand for data centres."

Source: https://www.thedailystar.net/business/economy/news/investment-pouring-data-centres-3467271