Is India Building Enough To Power Its Digital Transformation
DISCLAIMERS ON THE ABOVE HYPOTHESIS:
Installed capacity (MW) 2023
Country
Internet users (million)
Internet Users/MW
Our analysis using the above two approaches concludes by reinforcing the potential growth that the Indian data centre industry could potentially achieve over the medium term. However, our analysis considers a robust growth (based on available market stats) in India’s digital penetration rates and further expansion of the digital penetration, which would increase data centre demand manifold. It is possible that our analysis might get affected by the following factors:
Australia
2321
26,645,900
11,480
China
5721
1,165,569,000
203,735
France
1278
62,000,000
48,513
India
3299
1,011,010,400
306,460
Indonesia
682
232,704,900
341,210
Japan
2748
113,590,200
41,336
Singapore
853
5,587,200
6,550
It is possible that expansion of 5G networks remains lower than what market has been estimating. This could impact the rate of data consumption going forward as well as demand for data centers.
We also assume continuous improvement in support infrastructure such as fibre network and power supply. For instance, a nationwide fibre optics project is currently underway. In case, there are delays in fibre optic rollout that could impact digital services take-up, it would hinder potential data centre demand.
South Korea
1186
50,332,800
42,439
UK
2228
67,200,000
30,162
USA
10883
321,188,600
29,513
Source: International Telecommunication Union (ITU), country telecommunication ministries, C&W Research
However, given the current pipeline of under-construction & planned colo projects worth 2.32GW, India will have
nearly 3.3 GW of colo capacity as of 2028 and that would still render its internet users per MW ratio as the weakest
Global hyperscalers such as AWS, MS Azure is moving ahead with major captive cloud centre projects. This could potentially impact the colo data centre demand to some extent given that hyperscalers account for a significant proportion of colo demand at present.
Expansion of AI is driving growth of data centre across many countries across the world, this will possibly be a major growth driver in India as well in the upcoming years. This will also lead to higher power requirement which means robust uninterrupted power supply will be crucial going forward. In case, the power supply is inadequate that could affect data centre demand.
amongst global peers, except Indonesia. Therefore, India should aim to bring the ratio down to 203,735 people
per MW, equivalent to that of China’s market estimate for 2028. If we were to target that, India would need at least
1.7 GW of additional colo capacity creation over and above the currently visible pipeline of projects as per this
approach. Using both the above approaches (i.e., mobile phone data and internet users’ population) it can be said
that India’s DC market needs substantially higher investments and participation from various stakeholders. There is
a need to commission 1.7 – 3.6 GW of additional colo capacity, over and above the current under construction and
planned pipeline, on a conservative basis. Without this, the opportunity for Indian economy to capitalize on the
growth story around digital adoption could be restricted to some extent, and the domestic colo industry could lose
a chance to become a hub for the wider geography.
While India economic outlook remains healthy over the medium term, in the event of any economic slowdown due to domestic or global factors, digital spending by consumers could be affected. This could lead to a slowdown in data centre demand.
28 | CUSHMAN & WAKEFIELD
DATA CENTER REPORT - 2024 | 29
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