Is India Building Enough To Power Its Digital Transformation

Disclaimer: We have used the metric petabyte/MW to compare the availability of data center installed capacity in India vs other countries. Please note that cloud firms self owned campuses are not included in this metric. MOBILE DATA CONSUMPTION APPROACH About the approach: The mobile data consumption approach is a relevant one for emerging economies as it looks at the potential rise in the demand for data in the near future mainly through smartphones. India is unique as it is a ‘mobile-first nation’, and smartphones become the primary driver of data. We believe, smartphone data consumption is a comprehensive tracker of data generation than other indicators such as OTT usage, social media usage etc., which might be more suitable for relatively advanced economies. We established in the Chart no. 10 above, India’s PB/MW ratio of 13.2 was better than that of Indonesia at 18.8 PB/MW, whereas India’s ratio trails behind most other countries including China. India performs better than Indonesia in terms of the ratio over the forecast period as well. While Indonesia is forecasted to have a PB/MW ratio of 9.1, India’s will be lower at 9.0. Therefore, the closest nation for India to aspire closing the gap with over the forecast period is China. Thus, China becomes the benchmark for our exercise. India’s current pipeline of under-construction and planned projects are lower than China in comparison and needs to be ramped up so that the nation can reach Colo penetration level similar to China (i.e. PetaB/MW ratio) over the forecast period. As of 2028, India is estimated to have 3.3 GW of total installed colo capacity (IT load), although it’s PB/MW ratio (at 9.0) will continue to remain lower amongst comparable nations, except that of Indonesia.

INTERNET USERS’ PENETRATION APPROACH

About the approach: The internet user penetration approach is the broadest measure as it would cover data consumption across all strata of consumers and across multiple devices. Here we look at population that currently has access to internet and compare it with the installed colo capacity in the country to check if internet users/ MW is at comfortable levels in India when compared with other nations. A smaller ratio would indicate better penetration of colo data centers among internet users, and vice versa. Disclaimer: We have used the internet users/MW to compare the availability of data center installed capacity in India vs other countries. Please note that cloud firms self owned campuses are not included in this metric. To test the analysis further to determine future colo capacity addition requirements, we have used yet another broad approach, i.e. the internet users’ penetration approach. Here we compare internet users in year 2023 with the installed colo capacity for the same year. Once again, a huge amount of under-penetration of colo capacity is visible in India, where 0.6 million internet user population in India are currently dependent on every 1MW of installed colo capacity. On the other spectrum is Singapore, where every 1MB of installed colo capacity exists for merely ~6,000 internet users. With an installed capacity of 188MW currently, Indonesia’s ratio (0.9 million) once again becomes the nearest gauge for India. Other countries, including China, are way ahead of India, in terms of internet users/MW ratio. In this case, Indonesia could have been considered as benchmark given that the country is also witnessing a substantial expansion of data centre capacity.

TABLE-2: DERIVATION OF PB/MW RATIOS FOR INDIA, INDONESIA AND CHINA (2023, 2028E)

TABLE-3: DERIVATION OF INTERNET USERS / MW OF INSTALLED COLO CAPACITY ACROSS COUNTRIES (2023, 2028E)

PB/MW Installed capacity

Mobile data consumption approach

Mobile data usage (GB/ user/mo)

% Share of smartphone users

Mobile data(P3/ Month)

Installed capacity (MW)

Population (mn)

Smartphone users (mn)

Installed capacity (MW) 2023

Country

Internet users (million)

Internet Users/MW

India 2023 19.5

46.5%

1,423

662

12,906

977

13.2

Australia

1043

25,381,547

24,335

India 2028F 29.3

66.0%

1,487

981

29,634

3,299

9.0

China

3208

1,040,740,087

324,420

present, India has lowest netration of Internet, martphones, OTT as well as cial media users amongst mparable countries. wever, market estimates ggest that India is likely witness a steep growth digital adoption, which a major driver of data nsumption. Interestingly, en after exhibiting such h growth in digital option until 2028, India l still have room to grow to ach the penetration levels at is observed in other untries. China 2023 14.1 China 2028F 21.2 Indonesia 2023 16.0 Indonesia 2028F 24.0

71.8%

1,412

1,014

14,293

3,208

4.5

France

632

56,000,000

88,608

82.8%

1,404

1,163

24,592

5,721

4.3

India

977

657,168,725

672,639

80.2%

275

220

3,527

188

18.8

Indonesia

188

172,071,156

915,272

90.1%

287

259

6,212

682

9.1

Japan

1133

102,334,446

90,322

Singapore

677

5,473,398

8,085

is likely to reach 3.3 GW only. Therefore, India will have to add 3.6 GW of additional Colo capacity into the future project pipeline over and above the 2.32 GW already in various stages of construction and planning. Therefore, the data centers segment will require a bigger focus from operators, investors, and regulators in the near-to-medium term.

If India was to mitigate the gap with China, which is taken as benchmark for our exercise, it should aim to reach a target PB/MW ratio of 4.3 by 2028 (equivalent to China for the same year). For that to happen, India will need a total installed Colo capacity of 6.9 GW. Looking at the current pipeline of under-construction and planned colo DC projects, India’s installed capacity

South Korea

473

50,748,378

107,290

UK

1202

65,704,698

54,663

USA

8201

312,796,838

38,141

26 | CUSHMAN & WAKEFIELD

DATA CENTER REPORT - 2024 | 27