Low latency takes the pole position in India

Ultra-low latency is no longer an option but is as crucial as connectivity, playing a significant role in ensuring a high-quality user experience.

India is experiencing a surge in the popularity of the digital way of life in the post-COVID world. With over 658 million Internet users, approximately 47% of the country’s total population, an increasing number of Indians are getting connected to the digital world. Moreover, there is a growing trend of using cloud-based applications, services, and content among the population.

As we continue to work, learn, play and socialise from home, there is an increasing demand for high-quality connectivity. Being merely connected is no longer sufficient. In an increasingly pervasive digital economy, a dependable and high-speed connection is vital for fully participating and engaging with high-bandwidth content and applications.

In the volatile context of high-frequency financial trading, a slight delay can cause a trader to fill an order at a much higher share price than desired.

By building ultra-low latency networks, CSPs can differentiate themselves in the market, offering superior service and generating new revenue streams.

As the digital economy in India matures and the number of users continues to grow, it has become increasingly important to ensure robust connectivity. This is essential for people to take advantage of the opportunities offered by the digital world. While much emphasis has been placed on the speed and bandwidth aspects of a quality Internet connection, latency is often overlooked. However, it is a crucial component that plays a significant role in ensuring a high-quality online experience for users.

The latency factor

In recent years, low-latency connectivity has emerged as a critical component in ensuring high-quality Internet connectivity. This is especially important in time-sensitive use cases such as financial trading, online gaming, smart manufacturing, and video conferencing.

In simple terms, latency refers to the time it takes for data to travel from its origin to its destination and back. Therefore, the lower the latency, the better the online experience. Jitter is also closely linked to latency, as it refers to the consistency or inconsistency of latency across the network.

While minor delays may not seem like significant issues at the moment, they can quickly escalate into major complications down the line. For instance, in the volatile context of high-frequency financial trading, a slight delay can cause a trader to fill an order at a much higher share price than desired.

The latency issue has even given rise to an entire trading strategy called latency arbitrage. In this strategy, investors on ultra-low latency networks capitalise on the minor price differences in a stock that arise due to the time disparity between them and other market participants. This practice has a significant market impact, with a 2021 Bank for International Settlements study estimating global profits from latency arbitrage at about USD 5 billion annually.

It is, therefore, fair to say that ultra-low latency is no longer an option but is almost as crucial as connectivity. As a result, it is not surprising that it has become a fundamental consideration in designing and building networks.

The need for speed

The advent of new technologies such as 4G and 5G has brought about the ability to offer extremely low latency. For example, 5G can provide a latency of less than one millisecond, which is ten times lower than that offered by 4G. India conducted the 5G spectrum auction last year, and the Communications Service Providers, CSPs have only recently started offering 5G services. This technology is critical for use cases like Augmented Reality and Virtual Reality, which demand ultra-low latency. The widespread deployment of 5G will play a crucial role in reducing latency and, thereby, improving the quality of connectivity in the country.

Reducing physical distance is another crucial factor in reducing latency, as being closer to end-users, whether human or machine, means that data travels shorter distances and simpler paths. This is one of the reasons for the exponential increase in the number of datacentres in the country.

According to a recent study by ANAROCK-Binswanger, India had 138 datacentres at the end of March 2022, and this number is likely to increase to 183 by 2025. Additionally, a JLL study suggests that India’s datacentre industry will add 681 MW of capacity by the end of 2024, doubling its capacity to 1,318 MW.

The widespread deployment of 5G will play a crucial role in reducing latency and, thereby, improving the quality of connectivity in the country.

Reducing physical distance is a crucial factor in reducing latency; one of the reasons for the exponential increase in the number of datacentres in India.

The CSP’s gameplan

Service providers are already taking several steps to reduce latency. For example, Bharti Airtel is increasing capacity by introducing new undersea cable systems to India, which will speed up data transfer. It has also partnered with Meta to develop undersea cable infrastructure that will support high-speed Internet in the country and increase data-carrying capacities between geographies.

For CSPs, there are economic benefits to reducing latency in their networks. Consider the potential economic growth promised by the metaverse, which is expected to be a major beneficiary of ultra-low latency connectivity. The size of the metaverse opportunity is estimated to range from USD 750 million to USD 13 trillion by 2030, providing a significant new market for CSPs to leverage 5G fixed wireless access technology to deliver the ultra-low latency experience required for virtual and augmented reality.

In today’s fast-paced world, latency has become a crucial commodity in India. Public sector organisations, businesses, and communities are all striving to future-proof their networks, and this requires solutions that can keep up with the rapidly evolving online landscape that demands speedy, uninterrupted service.

Thankfully, there are already solutions being developed, refined, and made available by CSPs. By building ultra-low latency networks, these providers have a unique opportunity to differentiate themselves in the market, offering end-users superior service and generating new revenue streams for their business. By exceeding customers’ expectations and fostering loyalty, CSPs can establish themselves as leaders in this competitive space.

By Madhu Pandya

Madhu is a Senior Advisor for International Market Development at Ciena

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