Market Trends of Philippines Data Center Construction Industry
Tier III Expected to Hold the Major Market Share
- In 2023, there were around 20 data centers in the Philippines with tier III certification, with a cumulative IT load capacity of 230 MW. Reliability and affordability are the major factors driving the demand for tier III data centers in the country. The tier III segment is projected to register a CAGR of 11.5% to reach around 519 MW by 2030.
- In 2023, NCR solidified its position as a premier hub for tier 3 certified data centers. Leading the charge was Space DC (MNL1), with a remarkable IT load capacity of 72 MW in a single facility. NTT Ltd trailed closely, boasting a combined capacity of 42 MW across two facilities. Beeinfotech claimed 15 MW, Digital Edge + Threadborne Group (NARRA1) secured 10 MW, and ST Telemedia Global Data Centres, spanning five facilities, collectively accommodated an IT load of 15.8 MW. Other market players, in contrast, held smaller portions of the market.
- Over the study period, NCR is slated to construct approximately six data center facilities, each meticulously designed to meet tier III standards. These strategic facilities are projected to collectively contribute more than 90 MW of IT load capacity to the country.
- Throughout the study period, key players are planning to invest in data centers, including Epldt, Globe+STT GDC+ Ayala Corporation (Karmanedge Inc.), and ePLDT Vitro Data Center. These developments in the Philippine market are poised to amplify the demand for tier III-certified data centers. This heightened demand, particularly within the tier III segment, is expected to fuel the necessity for data center construction services over the coming years.
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IT and Telecom Segment Expected to Hold a Significant Market Share
- According to a survey titled "The Next-Generation Cloud Strategy in Asia," conducted by Alibaba Cloud, the digital technology arm of Alibaba Group, a significant 85% of Philippine businesses are gearing up for a full-scale cloud migration within the next two years. Furthermore, an overwhelming 91% of these businesses were set to boost their cloud investments in 2023.
- In addition, Allen Guo, the Country Manager for the Philippines at Alibaba Cloud Intelligence, emphasized at a roundtable event that Alibaba Cloud has been focusing on delivering highly scalable, secure infrastructure to Philippine enterprises. With an expected surge in cloud adoption, Alibaba Cloud is unwavering in its commitment to providing cutting-edge cloud solutions to the Philippine market.
- In May 2024, Converge ICT Solutions Inc., a prominent fiber broadband and technology provider, signed a strategic Memorandum of Understanding (MOU) with South Korea's NAVER Cloud Corp. Their collaboration aims to tap into the burgeoning cloud market in the Philippines. Converge ICT Solutions Inc. also aims to bolster digital transformation initiatives in the Philippines by leveraging NAVER Cloud's cutting-edge technologies. These technologies include smart city solutions and business tools like Large Language Model (LLM), Sovereign Cloud, WORKS (a B2B communication tool), and Whale (a browser-based web service integration platform).
- In terms of telecom growth in the country, in Q1 2024, Globe Telecom, a leading mobile operator in the Philippines, bolstered its network by erecting 116 new cell sites and enhancing 812 mobile sites to LTE. Additionally, the company strategically deployed 19,544 fiber-to-the-home (FTTH) lines, leveraging its existing fiber infrastructure to its fullest potential, especially in light of reduced capital expenditures.
- Philippine operator Globe Telecom reported that it had expanded its 5G footprint by installing 41 more 5G sites across Visayas and Mindanao in 2023. Of these, 27 sites were deployed in Visayas and 14 new ones in Mindanao in 2022. Globe noted that in 2023, it had attained 92.36% outdoor coverage in key Visayas and Mindanao cities and 97.90% in the National Capital Region, facilitating over 5.8 million devices connecting to Globe's 5G network in December alone.
- Such instances in the market are expected to create more need for data over the coming years. This surge in data storage demand is poised to elevate the need for data centers in the country, thereby bolstering the prospects of data center construction firms during the study period.
