On Wednesday, U.S. private equity group Carlyle stated, it has decided to purchase a 25% stake in Indian telecom firm Bharti Airtel Ltd’s data center arm for $235 million.

The development marks the rapid growth of digital services in India.

In a statement both companies said, the acquisition will provide Airtel’s Nxtra Data Ltd an enterprise valuation of around $1.2 billion. Airtel will continue to hold the remaining 75% stake in Nxtra.

Nxtra, which is building multiple large data centers across India, will use the proceeds from the deal to scale up its infrastructure, said both companies.

With a surge in demand for digital services, India is seeing an increase in demand for data centers with more businesses opting for cloud computing.

Cloud and entertainment services represent the next revenue frontier for traditional telecom carriers like Airtel, as voice and data rates in India remain among the cheapest in the world.