India – The next big interconnection ecosystemFrank P Orlowski

VP Corporate Development, DE-CIX International Corp.Head of Project Management, Mumbai-IX

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About DE-CIX

• First Internet Exchange launched in 1995 in Frankfurt / Germany.

• DE-CIX now serves 1000+ providers incl. Broadband providers, Content Delivery Networks, Hosters, and Cloud Companies.

• Operator of Exchanges on three continents• Europe (Frankfurt, Düsseldorf, Hamburg, Munich, Palermo, Marseille, Madrid)

• North America (New York, Dallas)

• Asia (Dubai, Mumbai)

• 100% data center and carrier neutral

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Note

• This presentation includes DE-CIX proprietary research conducted 2016-2018 while evaluating a market entry in India

• and intelligence from the Telegeography whitepaper „Internet infrastructure& interconnection in India“ produced by Telegeography on behalf of DE-CIX

• Since Mumbai is the largest market for IP traffic, colocation, andinterconnection in India we have put a focus on that specific market. Mumbai is likely to take the lead when it comes to the development of Interconnection in India.

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Introduction (1)

• UN Broadband commission:

• India is the second largest Internet market by subscribers

• Akamai:

• In Q1-2017 99% increase in access speed YOY

• Wikipedia:

• Jio introduced it‘s 4G mobile services in September 2016. By October 2017 thecompany served 130 million subscribers using 155k NodeB.

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Introduction (2)

• From a personal conversation:

• One of the leading dark fiber providers in Mumbai needs dozenze of Fiber Patrol drivers on Motorbiokes and 40 splicing teams to keep it‘s network operational.

• Where big content goes, network maturity becomes inevitable

• carrier neutral colocation and internet exchange infrastructure has to be deployed and enhanced

• Find this – and more important information – in the latest Telegeography whitepaper„Internet infrastructure & interconnection in India“ produced by Telegeography on behalf of DE-CIX

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Market environment - numbers

• Second largest market by number of Internet users worldwide (391 mio usersincl. 370 mio mobile users (from India regulator 31 Dec 2016)

• Largest emerging market for Internet services worlwide; Internet penetration2015 at 30% of population, 69% urban vs 13% rural areas)

• Primary broadband access technology is LTE; average speed is around6Mbps/user – ranks #97 globally in Akamai report 2016

• Total int‘l capacity in Sept 2016, 2.3 Tbps

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Market environment - numbers

• 144 licensed ISP (mainly access) plus approx. 1100 additional ASN (multihomed enterprises, Hosters, CDN, Integrators)

• Largest access providers are mobile operators, the key players are Airtel, Vodafone, Idia, Reliance Jio, BSNL (135 mio subscribers)

• India wide potential for an IXP is anywhere between 300-600 ASN, with a heavy focus on Mumbai, Dehli. Followed by secondary markets Chennai, Bangalore, Hyderabad, Sri Lanka, Bhutan, Burma

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General Market Overview – Int‘l Connectivity

• Perhaps no other communicationsmarket in the world has as muchnascent potential as India. India’sbandwidth demand will be staggeringas more end-users migrate to high-capacity platforms and applications.

• The most important hub forconnectivity is Mumbai which servesas an intercontinental hub, not just a regional one

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General Market Overview - Colocation

• As Mumbai is the hub of international connectivity for India, it is also thenation’s key colocation market. Other markets – such as Delhi – do not play a major role (yet).

• While carrier neutral colocationdevelopment is lagging in Mumbai (and India as a whole), ecosystems will certainly spur further development in this critical sector.

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General Market Overview - Content

• The world’s most dominant content providers determined that they must havea presence in Mumbai

• serving one of the largest user bases on the planet as it rapidly migrates to bandwidth-intensive applications.

• Where big content goes, network maturity becomes inevitable• carrier neutral colocation and internet exchange infrastructure has to be deployed and

enhanced

• Find this – and more important information – in the latest Telegeographywhitepaper „Internet infrastructure & interconnection in India“ produced byTelegeography on behalf of DE-CIX.

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Interconnection

• There is no mature carrier neutral colocation market by European or US Standards. There are relatively few facilities; less than 10 in Mumbai metro (a metro market with 27+ million inhabitants).

• Apart from Government backed NIXI (which is not an Internet Exchange byInternational standards) there are very few Internet Exchange Points in thecountry. As of today Mumbai-IX, a JVCo of DE-CIX International and a localgroup, is the only Exchange backed by a global player.

• Strict regulatory environment makes it more challenging to conduct telecomsand Interconenct business in India compared to most other markets aroundthe globe.

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Outlook

• By all indications, India‘s position as the next global communication hub iscoming to fruition.

• Combination of Int‘l content players and Internet Exchange Points to arrive will certainly spur further development in the interconnection niche – which iscritical to the development of the Internet sector.

• Mumbai already has the network support infrastructure in place to bring themarket‘s potential as an Internet hub to realization. Challenges such as thelimited supply of dark fiber need to be solved to boost the development.

• Mumbai‘s colocation market is already very competitive. Combined with theincreased availability of carrier neutral Internet Exchange infrastructure, thecost of interconnecting networks is becoming increasingly attractive.