1. Ruby Asia Holdings II Pte. Ltd. 2. Singtel Interactive Pte. Ltd.

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Page 1 of 13 COMPETITION COMMISSION OF INDIA Combination Registration No. C-2024/07/1168 5th November 2024 Notice under Section 6(2) of the Competition Act, 2002 given by Ruby Asia Holdings II Pte. Ltd. and Singtel Interactive Pte. Ltd. CORAM: Ms. Ravneet Kaur Chairperson Mr. Anil Agrawal Member Ms. Sweta Kakkad Member Mr. Deepak Anurag Member Order under Section 31(1) of the Competition Act, 2002 1. On 16th July 2024, the Competition Commission of India (Commission) received a notice under Section 6(2) of the Competition Act, 2002 (Act), given by Ruby Asia Holdings II Pte. Ltd. (Ruby) and Singtel Interactive Pte. Ltd. (Singtel) [hereinafter, Ruby and Singtel are collectively referred to as the ‘Acquirers’]. The Notice was filed pursuant to, inter alia, following transaction documents, each dated 18th June 2024: (i) Share Subscription Agreement executed by and amongst Ruby, Singtel and STT GDC Pte. Ltd. (STT GDC/Target) [SSA] [hereinafter Ruby, Singtel, and STT GDC are collectively referred to as the ‘Parties’]; (ii) Investors’ Rights Agreement executed by and amongst Ruby, Singtel, STT GDC, and STT Communications Ltd. (STTC) [IRA]; and (iii) Equity Commitment Letter issued by KKR Asia Pacific Infrastructure Investors II SCSp to Ruby (ECL). Also, certain other transaction documents have been executed inter-se Ruby and Singtel (Other Combination Registration No. C-2024/07/1168 Page 2 of 13 Documents) [hereinafter, the SSA, IRA, ECL, and Other Documents are collectively referred to as the ‘Transaction Documents’]. 2. In terms of Regulation 14 of the Competition Commission of India (Procedure in regard to the transaction of business related to combinations) Regulations, 2011 (Combination Regulations), vide letter dated 1st August 2024 (RFI), certain information and clarifications were sought from the Acquirers. The Acquirers submitted their response on 22nd August 2024 (Response 1). As the Response 1 was found to be incomplete, another letter was issued to the Acquirers, on 30th August 2024, in continuation of RFI, seeking requisite information and clarifications (RFI 2). The Acquirers submitted their response to the same on 13th September 2024, followed by additional submissions on 20th September 2024 (Response 2). Certain further clarifications were sought on the Response 2 vide letter dated 10th October 2024 which were provided by the Acquirers vide submissions dated 30th October 2024 and 1st November 2024 (Response 3) [Response 1, Response 2 and Response 3 are collectively referred to as ‘Response to RFI’]. Proposed Combination 3. The proposed combination involves the acquisition of up to 26% of the issued ordinary shares (on a fully diluted basis) in STT GDC by a consortium of Ruby and Singtel, through an Initial Investment and an Upsize Investment, which are described as follows: Initial Investment: Ruby and Singtel will subscribe to 18.3% interest in STT GDC, collectively, with Ruby subscribing to 14.1% and Singtel subscribing to 4.2%; and Upsize Investment: After the completion of the Upsize Investment, the collective interest of the consortium would be 26%. The Upsize Investment is exercisable as per the terms of the Transaction Documents. Parties to the Combination 4. Ruby is a special purpose vehicle incorporated for the purposes of the Proposed Combination and has no prior business activities. It is indirectly wholly owned by investment funds, Combination Registration No. C-2024/07/1168 Page 3 of 13 vehicles, and/or accounts advised and managed by various subsidiaries of KKR & Co. Inc. (KKR & Co. Inc., and together with its subsidiaries are collectively referred to as KKR). 5. Singtel is a wholly owned subsidiary of Singtel Telecommunications Limited (Singtel Parent), a public listed company incorporated in Singapore. As submitted, Temasek Holdings (Private) Limited (Temasek), directly and indirectly, holds aggregate shareholding of approximately 51.81% in Singtel Parent. The Singtel group is an Asian communications technology group, operating connectivity, digital infrastructure and digital businesses, and has presence in Asia, Australia and Africa. 6. STT GDC is a wholly owned subsidiary of Singapore Technologies Telemedia Pte Ltd. (STT), a Singapore-headquartered group active in communications and media, data centres and infrastructure technologies businesses globally. STT GDC is indirectly 100% held by Temasek. In India, STT GDC is present through its indirect subsidiary STT Global Data Centres India Private Limited (STT GDC India), which is a 74:26 joint venture between STT GDC and Tata Communications Limited. Identification of horizontal overlaps/vertical or complementary linkages 7. STT GDC India is engaged in provision of data centre colocation services in India. Accordingly, the primary activity relevant to the assessment of the Proposed Combination is ‘data centre colocation services’ and any horizontal overlaps/vertical or complementary linkages are identified considering ‘data centre colocation services’ as the frame of reference. To this effect, the Commission considered the activities of affiliates/portfolio entities of KKR, Singtel Parent, and Temasek in India. 8. As submitted, there are no horizontal overlaps/ no vertical or complementary linkages between the affiliates of KKR vis-à-vis STT GDC in India1. As regards Singtel Parent and 1 One of the KKR affiliates, CoolIT Systems Limited (CoolIT), inter alia, provides direct-to-chip liquid cooling solutions for commercial data centres, high-performance computing applications, and consumer desktop computers. Based on information submitted by the Acquirers, the Commission observed that CoolIT’s presence is Combination Registration No. C-2024/07/1168 Page 4 of 13 Temasek2, it is submitted that Singtel Parent currently has shareholding in Bharti Telecom Limited which is engaged in the business of making investments in its group company, Bharti Airtel Limited (Airtel). Airtel is engaged in the provision of telecommunication services in India, including telecommunication services in cellular, broadband and telephony, long distance and enterprise solutions and through its subsidiary Nxtra Data Limited (Nxtra), offers data centre colocation services in India. 9. Thus, the activities of STT GDC on one hand and Airtel/Nxtra on the other hand exhibit horizontal overlaps in the area of data centre colocation services in India. Further, certain vertical linkages are also observed considering that STT GDC India’s data centre colocation services may be potentially availed by Airtel towards its provision of: (i) mobile network services and solutions in India, (ii) retail fixed broadband internet services in India, and (iii) business connectivity services/B2B fixed broadband internet services in India. The Commission, accordingly, assessed the aforementioned horizontal overlap and vertical linkages. Assessment of horizontal overlaps 10. Data centres are dedicated facilities in which companies house and operate IT equipment that supports their business (such as servers and data storage). Data centres can be housed within business premises in which case a company sets up the data centre, manages its ongoing operations, and purchases and maintains the equipment (On-site data centres). Alternatively, businesses can choose to pay a recurring fee for renting floor space in the data centre to install their IT equipment and also pay for the use of power in the building. This type of services is also typically referred to as “colocation services” or “data centre colocation services” because several customers use the same data centre. As submitted, this is the primary business activity of STT GDC India and Nxtra in India. As regards the scope of data negligible to cause any impact on competition dynamics and therefore the potential linkage is not material to the assessment of the Proposed Combination. 2 One of the affiliates of Temasek, CapitaLand Group Pte. Ltd. (CapitaLand) is engaged in real estate investment and development services and provides real estate assets to market participants that provide data centre colocation services. Combination Registration No. C-2024/07/1168 Page 5 of 13 centre colocation services, the Acquirers have submitted and clarified that colocation services typically include: (i) the physical infrastructure, which is the backbone of operations with major components of power, cooling and security; and (ii) provision of rack space, data centre cages and suites, built to suit services which allow customers the benefits of scalability and flexibility. Further, it has also been stated that data centre colocation services include certain connectivity and support services which are intrinsically linked and are not offered on a standalone basis. Apart from On-site data centres and availing data centre colocation services, the customers can use Cloud data centres, where businesses can rent both space and infrastructure. However, as submitted by the Acquirer, whilst the Cloud data centres, On-site data centres, and colocation services represent alternatives serving similar needs for customers, colocation data centres/provision of data centre colocation services is a distinct service compared to On-site data centres or Cloud data centres. The Commission has also accordingly considered provision of data centre colocation services as an appropriate frame of reference for assessment of the Proposed Combination. 11. As regards the geographic market dimension, the Acquirers submitted that the customer’s choice for a data centre is based on factors such as: (i) the difference in the extent of demand depending on population and presence of business customers (i.e., proximity to customers and end users); (ii) suitability of a location for setting up data centres in terms of availability of dense optical fibre cable network, utilities such as water supply, absence of earthquake/flooding zones nearby, etc.; and (iii) latency on account of the increased distance between the server and users. In this backdrop, the Acquirers submitted that customers typically seek data centre colocation services within a particular metro and a given metro is generally not substitutable with another metro for the aforesaid reasons. Accordingly, the Acquirers proposed that the overlapping metros viz., Mumbai, Delhi NCR, Chennai, Bangalore, and Pune be considered as the distinct narrow relevant geographic markets. The Commission assessed the Proposed Combination accordingly. 12. First and foremost, the Commission considered the impact of the Proposed Combination in terms of level of concentration. In this regard, the Commission observed that the activity of provision of data centre is characterised by limited switching. As submitted by the Acquirers, Combination Registration No. C-2024/07/1168 Page 6 of 13 once a customer has contracted colocation service and installed servers and other equipment in a given facility of a data centre operator, there is limited switching in so far as that particular customer is concerned for the capacity he has contracted and this is on account of short-term impacts of changing their IT infrastructure and the relocation process, even if it would be more costly in the long term to stick with their current data centre services provider. Further, the Acquirers attributed lack of switching to factors such as latency, data loss, security concerns, etc. Considering the same, the Commission assessed the impact of the Proposed Combination on the level of concentration on varied basis viz., existing installed capacity, installed capacity likely to be available in medium term viz., FY 2027, and spare capacity. 13. The Commission observed that: (i) For Delhi NCR, the Parties’ combined share stands in the range of [25-30] % in terms of the existing installed capacity with an increment of [5-10] %. The spare capacity market share aggregates to [35-40] % with an increment of [15-20] % and projected aggregate share by FY 27 is likely to be [20-25] % with an increment of [0-5] %; (ii) For Mumbai, the Parties’ combined share stands at less than 5% in terms of existing installed/spare capacity which is likely to increase to [10-15] % by FY 2027 with an increment of [0-5] %; (iii) For Bengaluru, the Parties’ combined share stands in the range of [15-20] % in terms of the existing installed capacity with an increment of [0-5] %. The spare capacity market share aggregates to [40-45] % with an increment of [0-5] % and in terms of likely presence by FY 2027, Nxtra and STT will have a combined share in the range of [25-30] % with an increment of [0-5] %; (iv) For Chennai, the Parties’ combined share stands in the range of [35-40] % in terms of the existing installed capacity with an increment of [10-15] %. In terms of spare capacity, the combined share is in the range of [45-50] % with an increment of [20- 25] %. However, projected combined shares by FY 2027 are expected to be in the range of [30-35] % with an increment of [5-10] %; and Combination Registration No. C-2024/07/1168 Page 7 of 13 (v) For Pune, the Parties’ combined share stands in the range of [90-95] % in terms of the existing installed capacity with an increment of [35-40] %. The spare capacity combined shares are in the range of [95-100] % with an increment of [35-40] % and the projected shares are estimated to be in the range of [80-85] % with an increment of [25-30] %. 14. The concentration analysis as above captures the existing presence of the Parties and presence likely by FY 2027. The same is indicative of broader competition landscape and also the extent of likely entry in the markets affected by the Proposed Combination. Considering the same, it is observed that the Proposed Combination has a significant impact on the level of concentration as reflected in the market shares in the markets of provision of data centre colocation services in Delhi NCR, Bengaluru, Chennai and Pune. 15. However, considering the extent of shareholding proposed to be acquired by Singtel in STT GDC, the Commission also considered the submissions of the Acquirers regarding the rights being acquired by Singtel in STT GDC and the safeguards being introduced in the Transaction Documents to deal with existing/potential: (a) competing investments and (b) conflict of interest arising from activities of Nxtra and activities of Target in India. The Parties had agreed on certain safeguards aimed to prevent exchange of confidential information (CI) or commercially sensitive information (CSI) between the Target and Nxtra. However, considering the significant presence of Nxtra and the Target in India, the Acquirers were asked to explain how the safeguards are proportionate to the significant changes in concentration in certain markets resulting from the Proposed Combination. The Acquirers vide Response 3, while making submissions as regards the proportionality of existing safeguards, also submitted voluntary commitments under Regulation 19(2) of the Combination Regulations as given in the Annexure to this Order (Voluntary Commitments) in order to assuage and address concerns of the Commission in relation to the Proposed Combination, if any. The Acquirers clarified that the Voluntary Commitments are being offered by Singtel on account of its investment and existing rights in Nxtra and as a financial investor of (and with a minority investment in) STT GDC (Singtel Minority Investment) and would not apply to: (a) Ruby / KKR or any third party to whom Ruby or Singtel may in Combination Registration No. C-2024/07/1168 Page 8 of 13 the future transfer their shareholding in STT GDC or (b) any transaction other than the Singtel Minority Investment. 16. Considering the material on record, including the details provided in the Notice; the assessment of the Proposed Combination based on factors stated in Section 20(4) of the Act; and the Voluntary Commitments, the Commission is of the opinion that the Proposed Combination is not likely to have appreciable adverse effect on competition in India in any of the relevant market(s). Therefore, the Commission hereby approves the Proposed Combination under Section 31(1) of the Act subject to carrying out of the Voluntary Commitments as placed in the Annexure. 17. This order shall stand revoked if, at any time, the information provided by the Acquirers is found to be incorrect. 18. The information provided by the Acquirers shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act. 19. The Secretary is directed to communicate to the Acquirers accordingly. Combination Registration No. C-2024/07/1168 Page 9 of 13 Annexure A. Existing ring-fencing safeguards under the Transaction Documents in relation to exchange of confidential information (CI) or commercially sensitive information (CSI) will not be diluted. In relation to the Singtel Minority Investment, Parties undertake not to dilute the existing firewall provisions under the Transaction Documents. The key provisions that deal with flow of CI/CSI between STT GDC and its investors (i.e., Ruby and Singtel), and applicable firewalls to prevent information exchange by such investors with their “other” competing portfolio companies are set out below: (a) Special safeguards to ensure that there is no exchange of CI or CSI amongst “Competing Platform”: The Transaction Documents place emphasis to ensure that STT GDC's commercially sensitive information3 is not shared with any person(s) involved in the management or operations of, or management of an investment in, a competing platform (including any supervisory body or representative thereof). To that end, there are special safeguards that apply on how an investor may access, and use information received from STT GDC when it is invested in a competing platform (for instance, see clause (b) below). (b) India as a Competing Geography: Where an investor or its affiliates is involved in, either: (a) management of, (b) operations of, or (c) management of an investment in, a competing platform in the same country-market where an STT GDC group entity operates (in the case of Singtel, such competing platform being Nxtra in respect of STT GDC’s operations in India), then, in addition to the aforementioned prohibition(s) against sharing of commercially sensitive information, the investor must ensure that confidential 3 Commercially sensitive information includes confidential information relating to (i) pricing for specific assets, (ii) build costs for specific assets, (iii) strategies relating to utilities (including power supply) or land parcels; (iv) customer pipeline or any specific and material customer or business opportunity; or (v) pricing strategy, sales strategies, sales or promotional plans and plans relating to future infrastructure as service technologies. Confidential information would include any information relating to the business, operations, customers, assets or affairs of STT GDC or , of any affiliate company or group company of STT GDC. Combination Registration No. C-2024/07/1168 Page 10 of 13 information relating to partnering strategy, proposed specific acquisition of data centre or assets relating to a data centre pipeline project of the relevant STT GDC entity will not be shared with any person involved, in either: (a) management of, (b) operations of, or (c) management of an investment in, a competing platform. This condition will also apply to the Indian market given the presence of Nxtra and STT GDC in India. (c) No common directors/observers between STT GDC and Nxtra: As per the Transaction Documents, Singtel cannot appoint an observer to the board of STT GDC who is either a director, officer, employee (or otherwise involved in any way in the management or operations) of a competing platform. In other words, Singtel cannot appoint any person appointed as a representative of Singtel Parent to the board of Airtel (Nxtra’s parent company), or any person otherwise involved in the Airtel investment, as an observer to the board of STT GDC. In the reverse, Singtel would also not be permitted to allow any person who has served as the observer to the board of STT GDC to be appointed or redeployed to Airtel for at least a period of 12 months after they ceased to serve with STT GDC. This ensures that no live commercial information could be shared through any such channel between STT GDC and Nxtra. (d) Flow of information is restricted to certain members of Singtel: There is a prohibition under the Transaction Documents on any commercially sensitive information being shared with any person at Singtel who is involved in the management or operations of, or management of an investment in, any competing platform in the same market. The flow of confidential information or commercially sensitive information around STT GDC’s operations in India is therefore already restricted to members of Singtel Parent who are not involved in the management or operations of, or management of investment in, Airtel. (e) Dual Representative: To support the above restricted flow of information, any individual who is a dual representative, i.e., who is (a) on the board of directors of/involved in the management, operations and/or management of an investment in a competing platform (in the present case, Nxtra through Singtel Parent’s investment in Combination Registration No. C-2024/07/1168 Page 11 of 13 Airtel); and (b) is also a member of or otherwise participates in discussions of any supervisory body (i.e., board of directors of Singtel Parent) that is involved in the management of an investment in STT GDC will be required to recuse themselves from discussions of any such above mentioned supervisory body which relate to, or involve the management or operations of, the business of any STT GDC group entity. (f) Use of confidential information by Singtel: Singtel will only use the confidential information for the purpose of its bona fide monitoring and managing its investment in STT GDC. (g) Conflict of Interest: In case the consortium observer nominated by Singtel on the board of STT GDC comes to know or is otherwise informed by the board of STT GDC in good faith that an M&A opportunity or a customer opportunity is being pursued by a STT GDC group entity and also by a competing platform (such as Nxtra), then Singtel will procure for its observer to recuse himself/herself from the deliberations of the board or board committee of STT GDC and will cease to be entitled to receive any information in respect of the same. Further, during the period of conflict, Singtel will not be entitled to vote on any relevant reserved matters where such votes would provide a specific veto to block the decision in respect of the relevant M&A opportunity or a customer opportunity. The Acquirers also undertake the following commitments (Additional Safeguards): B. No employee or officer of Singtel to receive or have access to market specific information about STT GDC India. Notwithstanding the disclosure protocols that are already built into the Transaction Documents in respect of the sharing of commercially sensitive information and other confidential information of STT GDC India, Singtel proposes to enhance the regime around the sharing of information relating to the India market as follows: Combination Registration No. C-2024/07/1168 Page 12 of 13 “In relation to the Singtel Minority Investment, no employee or officer of Singtel, including the consortium observer nominated by Singtel on STT GDC , isolated deal team or anyone involved in the management of Singtel (including the board of Singtel Parent) as well as any other Singtel employee who is on the board of or directly involved in the operations or management of, or the management of an investment in, any competing business in India (including Airtel and therefore, Nxtra) shall receive any market-specific information about STT GDC India / Indian market and shall only receive aggregated / anonymized information at STT GDC group level in so far as STT GDC India or the Indian markets are concerned.” C. Singtel Nominee Observer to recuse themselves on discussions pertaining to the certain India entity. Notwithstanding the disclosure protocols and information barriers that are already built into the Transaction Documents in respect of the observer, Singtel in any case undertakes the following commitment in relation to the Singtel Minority Investment: “In relation to the Singtel Minority Investment, Singtel agrees and undertakes that the consortium observer nominated by it to the board of STT GDC will recuse himself / herself from all discussions / deliberations of the board or board committee of STT GDC which relate to the business of STT GDC India / Indian market. By doing so, the consortium observer will not have access to any discussion relating to STT GDC India / Indian market at the meeting of board or board committees of STT GDC.” D. Singtel Nominee Observer to not be an employee of Singtel In addition to the above safeguards provided for in the Transaction Documents Singtel also undertakes the following commitment in relation to the Singtel Minority Investment to address any concerns surrounding the bias of the consortium observer nominated by Singtel: Combination Registration No. C-2024/07/1168 Page 13 of 13 “In relation to the Singtel Minority Investment, Singtel agrees and undertakes that the observer appointed by Singtel will not be an employee of Singtel.” E. Acquirers undertake to provide the amended copy of the relevant Transaction Documents to the Commission The Acquirers agree and undertake to provide the Commission with an amended copy of the relevant Transaction Documents incorporating the undertakings prior to closing of the Proposed Transaction.