News & media Harnessing the Past for a Sustainable Digital Future: CRA’s Data Centre (DC) Expansion
How has České Radiokomunikace (CRA), Czechia’s national telecommunications champion, established their presence in the rapidly growing DC & Cloud market? Cordiant’s ESG Analyst interviewed experts from Cordiant and CRA to explore CRA’s aggressive yet achievable responsible growth strategy.
As digitalisation continues to transform business, education, entertainment, and healthcare, our time spent online has surged, immensely increasing our internet and data usage, and there are no signs of it slowing down. To meet this growing global demand, data centres have emerged as the warehouses of the digital world: efficiently storing, processing, and distributing massive amounts of information. If data centres are the warehouses, cloud computing represents the global logistics network that connects users to a vast, interconnected system of warehouses across multiple locations. Combined, these systems offer unparalleled flexibility and scalability, ensuring that data is available as and when it is needed. Due to the rise in demand of novel technologies such as artificial intelligence (AI), the need for high-density computing power has become urgent. There is now a critical requirement to increase the efficiency and capacity of these digital warehouses and logistics networks.
For the first time ever, data centre vacancy rates in Europe’s top 5 data centre markets (known as FLAPD – Frankfurt, London, Amsterdam, Paris and Dublin) has fallen below 10%, signalling that growing demand is beginning to outpace supply [1]. “Mature” markets such as FLAPD are struggling to develop new data centre capacity. Regulatory hurdles, such as building permits, coupled with limited access to power infrastructure, restricts the size of potential operations, particularly as data centres require a massive amount of power to store and process data. As power availability is a decisive factor in already grid-strained cities, expansion becomes constrained in mature markets.
Uncertainty in major data centre markets raises serious questions for the future of the industry. Where will growing demand go? Will DC capacity increase enough to satisfy it? Where will these energy-intensive digital warehouses get their energy, and will it be green?
Cordiant, as a global specialist investor with a finger on the pulse of the digital infrastructure world, sought to explore the answers to these questions. With a strong focus on middle markets, Cordiant went about identifying an investment opportunity that could flexibly and swiftly respond to current and future demand, while also advancing the investor’s sustainability goals.
This opportunity manifested itself in the form of Czech telecommunications company České Radiokomunikace (CRA), which Cordiant Digital Infrastructure Limited – the first UK-listed investment company to provide investors with dedicated exposure to the core infrastructure of the digital economy (LSE: CORD) managed by Cordiant Capital – acquired in April 2021. “We acquired CRA because we saw the potential of taking a leading telecoms and broadcasting infrastructure company – a ‘national champion’ – and further diversifying its operations to areas like DC & Cloud in a way which is synergetic to existing operations”, explains Hagai Shilo, Managing Director at Cordiant.
Following the appointment of Miloš Mastník as CEO, coupled with strategic changes to the senior leadership team, Cordiant’s Investment Team has been delighted with the management and their alignment with Cordiant’s dedicated ‘Buy, Build and Grow’ strategy. “CRA has a first-class management team with senior executives who spent many years in the telecom infrastructure industry,” outlines Shilo, “the team has managed to grow the business both organically and inorganically through various initiatives while also improving processes and efficiencies to enhance profitability.”
Among Central Eastern Europe’s (CEE) economies, massive computing demand is a recent phenomenon, and one that is only expected to grow. As FLAPD vacancy continues to shrink, demand must be met elsewhere on the continent. Czechia is strategically positioned to meet this demand. The country is a relatively untapped market in an exceptional location, and whose largest cities are already connected to major EU nodes through a robust and powerful fibre-optic network. “Third-party research indicates that the overall DC & Cloud growth prospects in Czechia are very attractive, and we believe CRA’s DC & Cloud platform could grow even faster than the overall market,” confirmed Shilo.
Over the course of CRA’s 60+ year history, their strong market presence in telecommunications and broadcasting has afforded them sufficient excess capital to unlock growth in budding business segments, namely DC & Cloud. With the support of Cordiant’s seasoned digital infrastructure specialists, CRA has enjoyed impressive revenue growth in these previously minor business verticals – ultimately usurping broadcasts’ historic revenue dominance, from ca.70% of revenue to under 50%, without compromising broadcast’s growth [2]. Currently, growth in CRA’s DC & Cloud segment is exceeding the corresponding growth in the Czech market (~mid-teens CAGR), allowing CRA to increase its market share. Rapid growth across business units has netted CRA a 14% increase in revenues and a 17% increase in operating profits in the first quarter of FY March 2025 compared to same period in the prior year, extending their streak of record-breaking financials.
Naturally, CRA’s recent focus on expanding their DC capacity was encouraged by Cordiant’s strong insight on the regional market and regulatory landscape. Cordiant’s Industry Team understood CRA’s strength of execution in Czechia as immensely advantageous in navigating regulations hindering DC development. Where foreign players looking to build new capacity in the region will struggle to secure building permits, CRA’s status as a national champion and ownership of brownfield sites facilitate their ability to develop new capacity and at lower cost. A noteworthy example is that of the Prague-Zbraslav site, a former AM transmission site that was selected to host CRA’s largest upcoming data centre. As a brownfield site, the DC Zbraslav site can take advantage of existing power infrastructure and the ability for redundant fibre-optic link, further enhancing connectivity. Additionally, it has the benefit of robust security parameters already in place.
DC Zbraslav will host up to 2,500 racks with a total capacity closing in on 26MW, making it one of the largest facilities in CEE. The site will also offer competitive power pricing thanks to its proximity to Prague and access to large, renewable energy sources. Boasting massive DC capacity and superior connectivity through fibre-optic network-enabled Internet NIX, DC Zbraslav will represent a first of its kind DC facility in Czechia and establish CRA as a national and regional leader in DC and cloud computing. DC Zbraslav will mark a significant step forward in CRA’s efforts to meet growing capacity demand when the state-of-the-art site comes online.
In a bid to satisfy existing demand, particularly from local clients keen on storing sensitive data domestically, CRA leveraged their proficiency in technological innovation to drive DC growth. To swiftly respond to growing demand, CRA is decommissioning radio and TV transmission sites and retrofitting them to support data centre and digital broadcast technology. Recently decommissioned brownfield sites are ideal for rapid DC capacity expansion as they offer significant space in central, fast locations with existing connections to fibre-optic networks and renewable energy. Anna Tůmová, Strategic Communication and ESG Director at CRA, explained, “we’ve repurposed premises made available by decommissioning outdated equipment into DCs that adhere to modern sustainability principles. This approach eliminates the need for new premises and infrastructure investments, as our existing buildings offer secure access, a stable energy supply, and are designed for technological operations”. This approach to DC development, aligned with CRA’s diversification strategy, allows them greater flexibility by increasing their computing capacity while circumventing many of the barriers restricting their competitors in mature markets. Cordiant’s hands-on team has helped CRA aim for larger opportunities than what a mid-market firm would normally go for, and CRA has proven their ardour to achieve these ambitions. For example, CRA has successfully navigated several major deal negotiations, including their first M&A deal with the acquisition of Cloud4com and DC Lužice from ARICOMA Group to the tune of CZK 1.5 billion (~ £ 50.25 million).
Sustainability at these sites is of paramount importance for Cordiant and CRA alike. “We strive to minimise waste and utilise renewable energy,” says Tůmová. “One of our top priorities is to reduce the carbon footprint of the digital economy by integrating renewable energy and improving energy efficiency at both the network component and design level.”
In line with their energy initiatives, CRA began installing solar panels and using waste heat to reduce heating demands across selected sites. The increase in energy efficiency associated with the transition from transmission to data centres, combined with other energy initiatives, has contributed to CRA’s target – set in alignment with Cordiant’s strategy – to achieve 100% renewable energy use by 2025. CRA is steadily on the path to meeting that goal, having increased renewable energy use from 47% to 69% between 2022 and 2023 [3].
“Sustainability is an important topic for CRA, and its significance has grown even more with the involvement of Cordiant Digital Infrastructure, who are highly proactive when it comes to ESG,” explained Tůmová, “thanks to Cordiant, we have gained a new perspective on ESG. At CRA, we excel in efficient technological innovation and leveraging these innovations to drive further growth.”
By repurposing brownfield sites, CRA has increased their capacity to respond to rising demand and grow their presence in the DC & Cloud market. The opening of DC Cukrák in April 2024 marked their eighth operational data centre and seventh built on retrofitted brownfield sites. Despite their aggressive expansion, CRA continues to sell out of capacity with each new data centre, prompting plans for potential future development of brownfield sites and capacity expansion. Cordiant remains deeply impressed by CRA’s execution on an ambitious strategy that retains strong consideration for sustainability initiatives and targets.
To learn more about České Radiokommunikace’s sustainability efforts, initiatives, and targets, you can read their latest ESG Report.
