TV Ramachandran, President, Broadband India Forum
A record-breaking 18.6 million people logged into the live streaming service Hotstar to watch the IPL cricket finals earlier this month. How did Hotstar handle such an incredible load on their system? They leveraged content-delivery network or CDN technology to improve latency speeds and quality of service. Twitch, the largest live streaming platform, relies on its own CDN to manage the viewing experience for millions of concurrent users. Netflix, while not in the live streaming industry, utilizes their CDN to deliver optimized-resolution video content to their vast global network. Around the world, end users are gaining from CDNs. How can we ramp up efforts to support the needs of Indian businesses and consumers?
By 2022, video content will constitute 80 percent of all internet traffic (Cisco) worldwide. By 2021, there will be one million minutes of video data traversing the internet per second (Cisco). India’s data consumption is growing at a tremendous 72 percent CAGR (Assocham-PwC). While current interest skews toward pre-recorded and uploaded content such as movies and TV shows, the world of live streaming is taking the internet by storm.
The global live-streaming industry is expected to reach USD 70 billion by 2021 (Research and Markets). News networks, sports coverage, and interactive gaming currently dominate. However, businesses and social user-generated live streaming (e.g., TikTok) are not far behind. All this user demand for video and live streaming increases the requirement for robust CDNs to transmit content efficiently. Indeed, the world of CDNs is booming at 12 percent CAGR and is expected to reach USD 22.1 billion by 2024 (Markets and Markets).
The CDN industry is dominated by traditional players like Akamai, Amazon Web Services, Google, and Limelight networks. Additionally, individual organizations are delivering content through their own CDNs. India experiences massive data flows and it is time for more Indian players, including telecom service providers or TSPs, to penetrate the market and offer better services.
Indian players have been slower to integrate with CDNs. Notable exceptions are Reliance Jio and Airtel that have their own rich content banks. Jio and Cisco partnered to integrate a mobile CDN while Airtel is leveraging Limelight Network’s CDN. These organizations can then lower reliance on public bandwidth for content delivery. CDNs can stream content resourcefully and TSPs can target a larger market. While there is initial investment required to develop CDNs or partner with CDN players, the benefits are numerous.
So, what are CDNs? They are vast networks of connected servers worldwide that help transmit data to end users at lightning speeds. You might have heard of the Mumbai dabbawalas – heroes of the lunch hour. An intricate network of delivery operators collect and deliver food on time all over Mumbai to over 200,000 locations a day. The lunchboxes or dabbas change hands at strategic junctions or nodes throughout the city to optimize delivery based on location and travel time.
Similarly, CDN servers act as nodes that cache (temporarily store) frequently requested data closer to the end user so it can be retrieved rapidly. A web page that you use often, like the Google homepage, will load much slower than normal if you delete the ‘cache’ in your browser. Caching helps the end user get to content quicker.
Indian TSPs are burdened by high duties, taxes, and spectrum pricing – among the highest globally. They also struggle with very low user tariffs. India has always been, and always will be, a price-sensitive market. It is, therefore, useful for operators to embrace newer technology that transmits content efficiently to help remain competitive. We cannot ignore the enormous pull market demand of Indian users for data consumption.
Average Indian users spend 8.5 hours per week watching online videos or live streaming – much more than regular TV. This is greater than the world average for online viewing (Limelight Networks). India experienced 109 percent growth in data traffic in 2018 due to 4G (Nokia annual MBTi), and 65 percent of our population are still not internet-enabled! There are tremendous opportunities before us.
There are certainly challenges to setting up CDN servers in India. These include real-estate costs, need for large and uninterrupted power supply, and bandwidth considerations – particularly in remote areas. This is because in India, we rely more on wireless networks to transmit data. Wireless is incapable of handling such large loads, and adding to this, there is insufficient wireless tower coverage for existing demand.
The rest of the developed and developing world uses fixed lines to transmit majority of their data. Our wired or fixed-broadband infrastructure is also lacking. High spectrum pricing adds to the issue with a significant percentage lying unused. Using cached data networks like CDNs help reduce bandwidth costs and can provide relief.
Some may ask, “Aren’t lower latencies just a nice-to-have?” My answer is a resounding no. Let us look directly at consumer behavior for online businesses. Fifty-three percent of mobile users will abandon a website that takes longer than three seconds to load (Google 2018). Consumers today have a world of choice and brand loyalty does not matter, if user experience is sub-optimal. This can cause lakhs of rupees in losses in an industry where every click means money. Globally, most viewers abandon a video if it takes longer than two seconds to start, and for each additional second of delay, another 6 percent of viewers leave (Akamai).
As entertainment gets increasingly interactive and real-time in nature, there is added demand on networks – as much as 50 percent higher latency (PhiMetrics). Most importantly, just like traffic jams affect emergency services like ambulances on clogged roads, high-traffic routes will affect data packet transmission for higher-priority services like payment and VoIP.
Thus far, the content delivery discussion in India hovers around entertainment and direct-to-consumer businesses. After all, video entertainment is the biggest piece of the Indian data consumption pie. One-third of video searches in India are entertainment-related, but searches in other categories like lifestyle, education, and business comprise the rest and demonstrated 1.5×–3× growth in the last two years (Google). By 2022, the online Indian video market is estimated to be amongst the top ten in the world (Assocham-PwC).
While this is excellent, we will miss the boat if we ignore the potential to empower more business-to-business data transactions in the fields of finance, advertising, healthcare, and agriculture. Dense fixed-line infrastructure and CDNs can boost Indian businesses, including small- to medium-sized players. With continued access to high-capacity networks, we can better leverage artificial intelligence computing, big data analytics, and implement greater automation to realize operational and business efficiencies.
The need of the hour for TSPs in India is to upgrade the existing bandwidth infrastructure and partner with both traditional and new types of CDNs to improve latency rates and quality of service. The government and regulators can play a greater role in attracting the huge investments required to set up the required large number of CDN servers in India by assisting to eliminate various roadblocks for operators. In fact, the consumers, the country, and the economy stand to gain enormously from TMT (technology, media, and telecom), if only it is ensured by the concerned ministries and regulators that the Hon’ble PM’s golden principle of maximum governance and minimum government is strictly followed in this sunrise field.
Days when content providers were separate from telecom service providers are long gone. Integrated working with packages based on quality of service (QoS) will be the winners – in the near and distant future. TSPs must embrace this or risk losing massive opportunities to meet Indian consumer demands.
Author is Hon. Fellow of the IET (London) and President of Broadband India Forum. Views are personal.
Research inputs by Chandana Bala