Market Trends of APAC Data Center Networking Industry
IT and Telecom to Hold Significant Share
- In Asia-Pacific, the hyper-connectivity environment has reinforced the importance of telcos, which play a foundational role in supporting consumers' and enterprises' connectivity and collaboration needs. Across Asia-Pacific, 75% of the operators registered positive revenue growth. South Korea is second only to Hong Kong in the world rankings of telecom market maturity.
- South Korea is also on the leading edge of the latest telecom technology developments, including around 6G. In terms of investment, in November 2022, Malaysian telcos Celcom and DiGi approved the merger agreement. Once the two companies are fully merged, the new entity will be one of the largest carriers in Malaysia, with over 20 million subscribers.
- The advent of 5G in the Asia-Pacific region has accelerated small-cell deployment for high-speed network connectivity. Many nations have created exemption standards that can be applied when deploying new Small Cells. For instance, in Singapore, The Infocomm Media Development Authority (IMDA) has directed the building developers and owners to provide rooftop spaces free of charge for telecommunication equipment the telecom providers.
- Regarding IT infrastructure, the Southeast Asia data center market is expected to shift majorly towards adopting switches with a capacity of over 40GbE and flash storage devices. Data localization law has been a major driver for data center construction in countries where operators must develop facilities to store data and information within their borders. Data localization in Malaysia, Indonesia, and Vietnam has been a boon for the growth of the data centers in such countries, leading to major networking solution adoption.
- In April 2022, Internet Multifeed Co., the provider of JPNAP, one of Asia's most significant Internet exchanges (IX1), Internet Initiative Japan Inc. (IIJ), an internet service provider (ISP) in Japan, and NTT Communications Corporation, the ICT solutions, and international communications business within the NTT Group, announced that they had conducted the first successful IX interconnection in Asia utilizing 400-gigabit Ethernet, which has four times the traffic bandwidth of regularly used 100-gigabit Ethernet. Such initiatives are expected to showcase a positive market demand.
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India to Hold Significant Growth
- India is one of the fastest-growing economies globally, and due to the combined impact of the growth of several end-user segments utilizing networking systems, the country is expected to showcase major market growth. The number of active Internet users in India is expected to rise by 45% from 2020 to 2025 and touch 900 million by 2025 from around 622 million in 2020, according to the Internet and Mobile Association of India.
- Further, companies are investing in developing various new technologies and Wi-Fi routers for increased efficiency, network capabilities, and reduced latency. For instance, in September 2022, ASUS launched the ROG Rapture GT-AX6000 Wi-Fi-6 router in India. It is equipped with Broadcom 2.0 GHz quad-core 64-bit CPU and Wi-Fi 6 chipsets. This router is capable of delivering wireless speeds of up to 6000 Mbps and contains two 2.5 Gbps Ethernet ports.
- In terms of policy, the Government of India and various state governments are revising their data center policies to support the infrastructural growth of data centers in India through tax subsidies. Under a national policy framework for data centers, the IT ministry intends to provide up to INR 15,000 crore as incentives. The government plans to invest up to INR 3 lakh crore in the data center ecosystem over the next five years, as per the policy.
- Since the pandemic, cloud computing has evolved as a mission-critical technology for businesses, governments, and consumers. For instance, in May 2024, Bharti Airtel ("Airtel") and Google Cloud announced a long-term partnership aimed at providing cloud solutions to businesses in India. This strategic alliance is set to provide a range of advanced cloud solutions from Google Cloud, accelerating cloud adoption and modernization for Airtel's clientele.
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