Is India Building Enough To Power Its Digital Transformation

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OTT PENETRATION

SOCIAL MEDIA USER SHARE

Is the ongoing capacity addition enough to mitigate the problem of under-penetration? In 2023, India added 258 MW of Colo capacity, the highest recorded. Around 2.32 GW of projects are at various stages of construction or planned over the next five years (2024-2028). Thus, on average, India will be adding 464 MW of Colo capacity each year until 2028. While this may seem like a good delivery speed given the past trend, we believe that accelerating this pace could unlock significant opportunities for India’s data center and technology sectors. With the right speed, we can better cater to the anticipated rapid growth in technology usage and 5 G services, paving the way for a more robust and competitive industry. India will likely experience the fastest growth in the penetration of smartphones, internet usage, OTT subscriptions, and social media usage over the next five years. With the launch of 5G services in 2022, future applications that utilize generative AI and IoT will require much higher DC infrastructure support than is currently needed.

33%

30%

0% 20% 40% 60% 80% 100%

USA

CHART-11: PENETRATION OF INTERNET, SMARTPHONES, OTT SUBSCRIBERS AND SOCIAL MEDIA: INDIA VS. OTHERS

INDIA

CHINA

JAPAN

FRANCE

S.KOREA

INDONESIA

AUSTRALIA

SINGAPORE

Source: International Telecommunication Union (ITU), Global Data, Ormax, Meltwater, Statista, C&W Research

India has the lowest penetration of Internet, smartphones, OTT, and social media users among comparable countries. However, market estimates suggest India will likely witness steep growth in digital adoption, a significant data consumption driver. Interestingly, even after exhibiting such high growth in digital adoption until 2028, India will still have room to grow to reach the penetration levels observed in other countries. Both advanced, and leading emerging nations realize that applications utilizing 5G network services, generative AI, and IoT applications will generate a much larger quantum of data. Therefore, the existing installed Colo capacities could soon become insignificant. Consequently, all the comparable countries we have examined, including advanced nations such as the USA, Japan, and Australia, are further adding to their existing Colo capacities. With countries like the USA and China, which already have the highest Colo installed capacity, continuing to add more capacity, India will also have to double up on its project delivery speed.

INTERNET PENETRATION

SMART PHONE PENETRATION

CHART-12: INDIA’S DIGITAL ADOPTION TO WITNESS A MULTI-FOLD RISE

2022 2027F

47%

There is realization amongst both advanced as well as leading emerging nations that applications that use 5G network services, generative AI and IoT applications will generate much larger quantum of data. Therefore, the existing installed Colo capacities could soon be rendered insignificant. Consequently, all the comparable countries that we have been looking at are further adding to their existing colo capacities, including advanced nations such as the USA, Japan and Australia etc. With countries like the USA and China, which already have the highest Colo installed capacity, continuing to add more capacities, India too will have to double-up on its project delivery speed.

46%

33% 78%

46% 79%

30% 66%

0% 20% 40% 60% 80% 100%

47% 75%

USA

INDIA

CHINA

JAPAN

FRANCE

S.KOREA

INDONESIA

AUSTRALIA

0% 20% 40% 60% 80% 100%

SINGAPORE

Sources: International Telecommunication Union (ITU), Global Data, Ormax, Meltwater, Statista, C&W Research

Smart Phone Penetration

OTT Penetration

Social Media User Share

Internet Penetration

22 | CUSHMAN & WAKEFIELD

DATA CENTER REPORT - 2024 | 23

Source: Department of Telecommunications, Ormax, Statista, C&W Research

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