Japanese telecoms giant NTT today announced the opening of a new data centre in Dagenham, London, in the latest win for the UK as the pandemic continues to accelerate digital infrastructure investment.

The London 1 Data Center is expected to create up to 100 new jobs and forms part of NTT’s plan to invest £500m into UK data centres, including another site in Hemel Hempstead that the company announced in October.

The east-London industrial area where NTT’s new data centre is located was known historically for the production of penicillin during the second world war and Ford cars, but has continued to attract investment in the digital economy, including a new planned Hollywood-style film production complex. 

Florian Winkley, the chief executive of NTT’s Global Data Centers EMEA, said that UK data centres are a “critical enabler” of global business and ensuring year-round business continuity.

“The pandemic has demonstrated the vital importance of effective connectivity and reliable infrastructure for businesses to operate,” he added.

The Japanese multinational technology service provider confirmed its UK-wide data centre plans back in September 2020, shortly after a post-Brexit free trade agreement was signed between the UK and Japanese governments. 

Jason Goodall, the chief executive of NTT Limited, the ICT services business set up and headquartered in London by the Japanese telecoms giant in 2019, said that this “milestone” data centre and large investment shows the company's “commitment to the UK market as well as the demand from our customers for sustainable, secure and scalable” data centres, adding it was “fundamental” to the company's growth plans.

Since 2010, NTT has been the fourth most active cross-border investor globally in the data processing, hosting and related services sector, according to greenfield investment monitor fDi Markets, lagging behind other major players such as US-based Equinix and Cloudflare.

The Global Data Centers division of NTT has more than 160 data centres in over 20 countries and regions, including North America, Europe, Africa and Asia-Pacific. 

UK data centre lead

Digital infrastructure projects have become increasingly important due to the pandemic-induced shift to remote work and the rollout of 5G technology, and form a central part of the UK’s plans as it approaches the end of its transition period away from the EU.

The UK’s minister for investment, Gerry Grimstone, who heads the UK’s recently launched centralised office for investment promotion, said that digital infrastructure projects are “fundamental to our wider digital and investment strategies.”

“NTT’s continued commitment to the UK will help us to build and solidify our reputation as a leader in technological innovation in the industries of the future that will help us build back better,” he added.

Since 2010, the UK has been among the largest destinations for foreign investments in the data services, hosting and related services sectors, according to fDi Markets. At the city level, London is on par with Singapore as the leading data centre destination.

The UK’s appeal to foreign companies setting up data centres is rooted in a well-developed industry, with some of the best availability and quality of labour, and a business environment conducive to investment, according to investment destination comparison tool fDi Benchmark.

A benchmarking study into the suitability of 31 European countries for data centre investment conducted on fDi Benchmark found that the UK was the best location in terms of quality, with a score of 193.97, beating other prominent European data centre markets such as Germany (166.92), France (134.58) and Luxembourg (132.01). 

Domestic UK companies have also recently ramped up their UK data centre capacity, such as UK-based telecoms provider Three, which announced in November 2020 that it would invest over £2bn to launch 20 new data centres across the country. 

The new data centres, provided by its partners UK-based Ark and US-based Equinix, will improve reliability of Three’s network and serve customers when using gaming, video conferencing or any other Internet of Things applications. 

Three’s chief operating officer Susan Buttsworth said that the new data centres will allow the company “to spread the network load across the country”, bringing their customers closer to their data to provide better connectivity.

As the new normal of remote work and increased home internet use caused by the pandemic continues, investments into data centres in the UK and globally are likely to continue.