New ground for data boom

A steady rise of mobile data consumption in India, led by the rise of over-the-top (OTT) content streaming on the Internet, is poised to give a major fillip to India’s data centre industry. Alongside a boost in capacity to India’s established data centre hubs such as Chennai, Hyderabad and Mumbai, in line to receive a strong amount of interest from global and domestic data centre operators are the tier-2 cities in India, where data centres of smaller capacities are projected to find mainstream prominence this year.

This rising trend has been a long time coming. Last year, media reports cited some of India’s top data centre heads to state that the rise of tier-2 data centres, colloquially referred to as ‘edge’ data centres, have seen multiple delays in on-ground implementation due to the lack of need. A key reason for this was a slow but steady growth of OTT content.

Beginning of the Data Boom

Over the past year data consumption has skyrocketed in India, driven primarily by increasingly available live streaming content, and various mainstream media shifting to online platforms and away from satellite streaming.

TRAI’s performance indicator report pegs India’s average data consumption per person at 21.01 GB as of Q2FY25, up 10.1% from Q2FY24.

A case in point: in January this year, British pop band Coldplay’s much anticipated concert in Ahmedabad’s Narendra Modi Stadium was telecast live to viewers across the country throughout the band’s performance. It was the first such live telecast at this scale. The live stream drew 165 million minutes of viewing time on Disney’s Hotstar mobile streaming app.

These facts and figures are supported by the latest available data from the Telecom Regulatory Authority of India (TRAI). The performance indicator report from TRAI, published on 1 January, pegged India’s average data consumption per person at 21.01 GB as of Q2FY25, up 10.1% from Q2FY24. The pace of data consumption growth is currently faster than the pace of growth of wireless telephony users in the country.

Per TRAI’s telecom subscriber report as of November 2024, published on 22 January, the total number of wireless Internet and mobile services users was 903.8 million in India—up 5.2% from November 2023.

This growth disparity clearly shows that more users in India across circles are consuming increasing volumes of mobile data, driven by plenty of content available across online streaming platforms. In fact, in January, media reports underlined that in India’s Hindi language film industry, or Mumbai’s Bollywood, US streaming platforms Netflix and Amazon Prime Video are key dealmakers of movie productions—wherein streaming deals are now of tantamount importance to filmmakers for ample distribution to audiences, as against a movie theatre-based film distribution model.

Enter, the Tier 2 Data Centres

This rising shift in dynamic is causing India’s data centre operators to look at tier-2 cities more intently.

In January, real estate analytics firm Savills India published its domestic data centre market report. Speaking about the shifting dynamics to a business newspaper, Srihari Srinivasan, Director and Lead for Data Centre Services at Savills India, said, “India is rapidly emerging as a global data centre hub. The current momentum positions India as a promising global data centre hub. We project a strong demand for data centres in India in 2025, with an estimated demand of over 450MW of IT load across major cities, while supply addition is expected to reach 600MW of IT load during the same period.”

“The rise in mobile application usage is driving demand for edge data centres in cities such as Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Raipur, and Hubli.”- SRIHARI SRINIVASAN,Director & Lead – Data Centre Services, Savills India

“The increasing penetration of 5G and the rise in mobile application usage are driving demand for edge data centres in tier-2 and tier-3 cities such as Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Vizag, Coimbatore, Madurai, Raipur, and Hubli. Meanwhile, dominant Tier-1 cities continue to grow. By 2030, we expect data centre stock to reach 3,400 MW of IT load across major cities,” Srinivasan further added.

Alongside mobile data and content, processing of AI data closer to source is emerging as a key factor for this growth. The boom of this operation is being noted as more smartphone companies launch data-driven smartphones, such as the Samsung Galaxy S25 series that launched in January this year.

In December last year, a note by IndiaAI, the nodal AI business and operations body under the Ministry of Electronics and Information Technology (MeitY)’s Digital India Corporation, underlined this factor further. “Edge computing is revolutionising data processing by reducing latency and bandwidth usage as it processes data closer to the source. Edge data centres are emerging as critical enablers of real-time AI applications, particularly in densely populated urban hubs. This trend aligns with the strategies of hyperscalers such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, which are expanding their data centre capacities to support AI workloads,” the note said.

In January, live stream of British pop band Coldplay’s concert in Ahmedabad drew 165 million minutes of viewing time on Disney’s Hotstar mobile app.

Such instances are cropping up all across the board. For instance, in November last year, Singapore-backed data centre firm STTelemedia Global Data Centres (STT-GDC) opened a 6MW ‘AI-ready’ data centre in Jaipur, Rajasthan. Vikram Nagrani, Chief Technology Officer of STT-GDC, said on this, “Edge data centres are becoming increasingly crucial to support India’s digital growth, as demand grows for compute-intensive apps that require low latency—including streaming apps, critical cloud-hosted business apps, online financial transactions and the Internet of things (IoT).”

In December, Uttar Pradesh-based data centre operator VueNow opened two new edge data centres of undisclosed capacities in UP’s Malihabad and Ambedkarnagar. Before this, in August, fellow domestic data centre operator, CtrlS, announced the acquisition of land to imminently build a 10 MW edge data centre facility near Patna in Bihar.

“Edge data centres are becoming increasingly crucial to support India’s digital growth, as demand grows for compute-intensive apps that require low latency.”- VIKRAM NAGRANI, Chief Technology Officer, STT-GDC

Sridhar Pinnapureddy, Founder and Chief Executive Officer of CtrlS, said upon the announcement that the company’s announcements were in line with the “market’s demonstrated potential.”

With such growth at stake, 2025 is fast emerging as the year when data centre operations spread out across the country. More small cities are likely to emerge as battlegrounds for data centre operators, which are out seeking business from myriad data operators, including mobile data streaming services, in order to capture a pie of a potentially vast domestic market.

The need for these edge data centres is exemplified by their roles in mobile data streaming and AI operations. For both these services, latency of a network is of tantamount importance. The latency of a service refers to the time taken for a packet of data to be transmitted from source, and received on a user’s device—in most cases a smartphone.

With rising volumes of live mobile streaming content and AI operations at hand due to applications that run connected to on-cloud AI models, edge data centres are thus a valuable resource that can ensure that the data in question remains cached at a nearby data centre. Strategic tier-2 and tier-3 cities are likely to thus emerge as a hub, in order to cater to India’s vast population demographic.

The need, accelerated during the COVID-19 pandemic, has turned into a necessity today, as content ranging from entertainment to education is being streamed online. For service providers, the ability to cache content closer to the source of a user is important in order to provide a competitive streaming experience.

With more streaming platforms also competing with each other in order to grab a larger share of the Internet pie, it is no surprise that edge data centres are on the rise—and 2025 is the year when edge facilities end up becoming one of the biggest contributors of growth for this industry.

By Vernika Awal

feedbackvnd@cybermedia.co.in