Mangaluru lacks enterprise demand required to attract data centres: study

Mangaluru lacks the scale of enterprise demand which would typically be required to act as a pull factor for data centres, as per the Mangaluru Data Centre Feasibility Study 2025.

Referring to challenges identified with reference to the generation of data centres in Mangaluru, the study, quoting stakeholders consulted, said that, unlike Mumbai or Chennai, Mangaluru currently lacks a specific sectoral push (e.g., Banking, financial services and insurance), as well as the presence of hyperscalers and/or government-induced demand.

The study was conducted by Karnataka Digital Economy Mission (KDEM), Silicon Beach Program of Mangaluru and Deloitte India.

“Stakeholders have noted that, unlike centrally located regions such as Hyderabad or Bengaluru, which are landlocked and lack cable landing connectivity, Mangaluru also faces challenges due to its limited radial connectivity to nearby demand hubs. Setting up high-capacity data centres in Mangaluru may not yield the expected returns as the surrounding regions are not high-demand generators,” the study said.

In the recent months, emerging cities, including Vishakhapatnam, have moved towards “demand signalling”, wherein they have secured pre-commitments from hyperscalers or even medium-sized data centre investors (across functions such as energy, telecom and real estate). “Stakeholders expressed that such signalling generates interest in investors and acts as a pull factor for players, which is currently missing in Mangaluru,” the report said.

It further said that the Mangaluru region requires pre-approved data centre parks, preferably complemented by plug-and-play facilities to readily enable the generation of data centres in the city. The pre-approved data centre parks are required to address land acquisition challenges.

The study also said that strengthening the existing network connectivity, in addition to a cable landing station, would enable Mangaluru to emerge as a strategic edge location for data processing and disaster recovery in South India.

The study noted that with the Telecom Regulatory Authority of India (TRAI) calling for ten times more cable landing systems in India to compete in the global race and TRAI simultaneously proposing a comprehensive framework to simplify submarine cable licensing and operations, ideal opportunities are opening for Mangaluru to take advantage of and therefore require immediate attention.

Mangaluru’s growth opportunity lies in building talent with specialised skills, the study added. To establish and maintain AI infrastructure and data centres, one needs to employ limited talent with highly specialised skills. A report by Georgetown University highlights that 60% of the required skills for data centres are actually non-technical. Amongst other skills, data centres typically require a multi-disciplinary team of engineers specialising in (a) hardware, networking equipment, storage systems, (b) operating systems, (c) software and cloud services, (d) cybersecurity, (e) infrastructure management, including mechanical, engineering and plumbing (MEP) abilities. Data centres require seamless management, continuous operations, the highest security standards and energy management. Such skills are crucial for delivering uninterrupted, high-quality services to customers, the report said.