Netflix, Amazon, Google Invest in CDNs to Meet Data Demands
Netflix, Amazon, and Google are investing heavily in content delivery networks (CDNs) to cater to the rising data needs in India's Tier-2 cities, including Pune, Hyderabad, Ahmedabad, and Jaipur. The surge in data consumption is primarily driven by OTT platforms, ecommerce services, and government digital initiatives. Other companies, such as Meta, Cloudflare, and Akamai, are also building out their CDN infrastructure to bring content closer to users, thereby reducing latency and improving internet performance.
A CDN is a network of servers designed to cache and deliver internet content closer to end-users, thereby reducing the time it takes for data to travel across the internet. This requires a huge investment in servers, computing infrastructure, and points of presence to manage increasing traffic and improve the user experience. According to Mitesh Jain, regional vice president – India at Akamai Technologies, the popularity of OTT platforms, online shopping, and digital government services is driving the demand for high-performance CDNs across the country.
India's CDN market is growing rapidly, from just $35.2 million in 2018 to $2.85 billion by 2027, according to the Telecom Regulatory Authority of India (TRAI). This calls for hosting content closer to population centers with the increasing penetration of internet and low data costs to meet a booming digital economy. The consumption rate of data in India will also shoot through the roof. Ericsson believes that India is destined to surpass China as the biggest data consumer in 2029, with average consumption at 68 GB per person per month, from the current 29 GB in 2023.
This change is interesting and Tier-2 and Tier-3 cities leading the charge to data consumption across regions in States like Tamil Nadu, Madhya Pradesh, Uttar Pradesh, Bihar, and Chhattisgarh in terms of the per-capita level use of 38-42 GB per month have been seen crossing the averages by a distance within metro cities Delhi and Mumbai of 30-34 GB of data usage a month. Raunak Maheshwari, executive director at Extreme Infocom, said that companies like Meta have greatly expanded their CDN infrastructure to state capitals and are likely to cover half of India's major cities within the next two years.
While investments in CDN infrastructure are accelerating, challenges remain, particularly the limited penetration of broadband and wireline networks in rural and semi-urban areas. India has approximately 1,500 population centers that have more than 50,000 households and many of which need better connectivity to unlock full data consumption. Despite these challenges, companies like Akamai are deploying CDN sites beyond metropolitan hubs and introducing edge computing centers in cities like Chennai, Mumbai, and Bengaluru to support applications like gaming, video streaming, and IoT.
India is the world's largest data consumption market, said a senior executive of a technology industry body, who cited 956 million broadband users, including 600 million mobile users. The low cost of data has led to the need for caching servers closer to consumers, and content providers are either partnering with telecom companies or building their own infrastructure.
As leading players like Netflix, Amazon, Meta, Google, and Cloudflare continue to expand their CDN investments, the country's digital landscape is going to change. Challenges in deeper geographies are still there, but investments will thereby boost internet connectivity and performance across India, making a way for a more robust and accessible digital ecosystem. With the potential to become the largest data consumption market by 2029, India’s CDN infrastructure will play a crucial role in supporting the next phase of its digital evolution.
