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Overview and growth of India’s connectivity market
With more than half a billion internet subscribers, India is one of the largest and fastest growing markets for digital consumers. This rapid growth has been propelled by both the public and private sector. For many people in India today, it is easier to have access to a mobile phone than to basic services such as public transport. As a result, the country has seen exponential growth in data generation.
India’s digital surge1 is well noted on the consumer side, even as its businesses have started to adopt ICT technologies such as cloud computing. As a result, the needs of various industry sectors have evolved. The highest demand for connecting data centres through long-haul, trans-oceanic, underground and pipeline cables to enable high-performance connectivity and computing is from the technologically most advanced banking, financial services and insurance (BFSI) sector and the IT and telecom sectors. Government projects such as BharatNet and the National Smart Cities Mission, where schools, hospitals and public security systems will have interconnected services, need passive optical network solutions. Multiple over-the-top (OTT) applications and cable TV operators need fibre-to-the-home connectivity for high-speed content streaming. Additionally, the recent pandemic and ensuing lockdowns have led to greater awareness of the need to be equipped for remote working, which may become a long-term requirement across many organisations.
As a result, data consumption in India is estimated to grow to 100 million terabytes by 2022.2 This data will be stored in a distributed ecosystem of multiple devices and data centres. Consumer preferences in terms of data consumption and the industry push for cloudification hence require significant growth in high-bandwidth and (in some instances) low-latency connectivity.
This growth in data consumption will impose capacity constraints on service providers (e.g. OTT and telecom players), even as the growing number of new-age digitally enabled enterprises demand higher capacity. As a result, the focus will shift to connectivity solutions on Layer 2 and Layer 3 of the Open Systems Interconnection (OSI) model. Layer 2 primarily consists of Ethernet, domestic leased circuit (DLC), international private leased circuit (PLC), etc. Layer 3 primarily comprises multi-protocol label switching (MPLS), software-defined networking in a wide area network (SD-WAN; sometimes also called Layer 2.5), and alternatives such as internet leased line.
1. As per the GoI report ‘India’s Trillion Dollar Opportunity’ (https://meity.gov.in/writereaddata/files/india_trillion-dollar_digital_opportunity.pdf), India’s Digital Adoption Index is expected to grow from 51% in 2016 to around 60% in 2024. As per Statista database (https://www.statista.com/statistics/255146/number-of-internet-users-in-india/ ), from 2018 onwards, the Internet user base is expected to grow at a CAGR of 6.7% to reach 666 million (49% of the population) by 2023.
2. https://www.assocham.org/newsdetail.php?id=7075
2. https://www.assocham.org/newsdetail.php?id=7075
Conclusion
To be a successful service provider in the Indian enterprise connectivity market, a connectivity player should start by focusing on the right customer segments, and developing tailored products and solutions for these selected segments specifically. Providers need to bridge the balance in their go-to-market requirements through the right partnership models to enable seamless end-to-end connectivity. Adequately viable segments are already present in the Indian connectivity market.
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