Material Insights · Understanding the Material World

Data centres and cloud and Telecommunications

Data centres are only useful when they are connected, so they cluster where fibre and subsea cables land, and cloud and content firms now generate most international traffic. Telecom operators in turn run their core networks and IT in data centres. In India the same few coastal hubs, Mumbai and Chennai, hold both the cable landings and most data-centre capacity, which concentrates risk.

Data centres and cloud (industry) and Telecommunications (industry): 6 relationships.

How they are linked

1. Buys from

Physical flow · ₹6.3 per ₹100 · Telecommunications buys from Data centres and cloud

Operators host their core network functions, billing and customer systems in data centres and increasingly on public cloud.

  • ₹6.3 of every ₹100 of Telecommunications output, all rounds (India 2022)
  • ₹4 bought directly

The link deepens as network functions move from dedicated hardware to software running on servers. US producer price indices show a modest link over a year (12-month correlation about 0.34, monthly 0.13), with data-centre prices leading by about six months.

Sources: OECD; Material Insights (World Bank, FRED, IMF data)

2. Buys from

Physical flow · ₹1.8 per ₹100 · Data centres and cloud buys from Telecommunications

Data centres buy fibre links, backbone capacity and internet transit from carriers to reach users and other sites.

  • ₹1.8 of every ₹100 of Data centres and cloud output, all rounds (India 2022)
  • ₹1.2 bought directly

The money share is small because the large cloud firms own much of their own fibre and subsea capacity, but every site still needs carrier links for the last stretch and for diversity.

Sources: OECD; TeleGeography

3. Industry input

Physical flow · Criticality 4 of 5 · Telecommunications to Data centres and cloud

Hyperscale cloud providers need network capacity, and fibre carriers and interconnection providers supply the fibre, backbone and subsea links.

A data centre without diverse fibre routes cannot sell low-latency or high-availability services, so connectivity is a siting condition alongside power and land.

Enterprise types that depend on it:

  • Hyperscale cloud providers: network capacity (criticality 4 of 5)
  • Fibre carriers and interconnection providers: fibre, backbone and subsea capacity (criticality 3 of 5)

Sources: Material Insights; CXOToday (CBRE data)

4. Industry input

Physical flow · Criticality 4 of 5 · Data centres and cloud to Telecommunications

Mobile and broadband operators depend on data centres for their core network and IT hosting, and telecom IT and managed-service providers for hosting.

An outage in an operator's core data centre can take down mobile service across a whole region, which is why operators keep redundant sites.

Enterprise types that depend on it:

  • Hyperscale cloud providers: network capacity (criticality 4 of 5)
  • Fibre carriers and interconnection providers: fibre, backbone and subsea capacity (criticality 3 of 5)

Sources: Material Insights

5. Cloud traffic

Transition · Strong · Cloud and content drive bandwidth demand

Traffic between data centres and from data centres to users now makes up most international bandwidth, so cloud growth sets the pace of new subsea cable building.

  • almost three quarters share of international bandwidth demand from content and cloud networks, 2024
  • 23% growth in global internet bandwidth, 2025

New subsea cables are now driven largely by content providers such as Google and Meta rather than traditional carriers. This shifts bargaining power: telecom carriers increasingly sell landing, backhaul and spectrum rather than the international capacity itself.

Sources: TeleGeography

6. Cable landings

Shared risk · High in India · Both rely on a few landing hubs

Subsea cables land at a few coastal points and data centres cluster beside them, so a cable cut or a disaster at one hub hits both industries at once.

  • 17 international submarine cables serving India, end-2024
  • about 1% India's share of the world's cable landing stations, 2025
  • 94% Mumbai's share of new Indian data-centre supply, H1 2026

More than 80% of India's operational data-centre capacity is in Mumbai, Chennai and Delhi-NCR, and Navi Mumbai and Chennai's Siruseri benefit from multiple landing stations. When the AAE-1, EIG and SEACOM cables were cut off Yemen in February 2024, repair ships were held back for about five months by the threat of attacks on shipping, showing how long a single cut can last. TRAI's chairman said in 2025 that experts think India's landing stations should increase tenfold.

Sources: TeleGeography; Outlook Business; CXOToday (CBRE data)

For investors

Key learnings

  1. Data-centre sites are valued for their fibre and cable access as much as for power, so landing stations shape where Indian capacity is built.
  2. Cloud and content firms now drive most international bandwidth and fund new cables, leaving telecom carriers a smaller share of the international capacity business.
  3. The concentration of Indian data centres and cable landings in Mumbai and Chennai means a single regional disruption can hit both industries.

What to track

  • New subsea cables landing in India: More cables and landing points reduce latency and outage risk (As announced · TeleGeography, DoT)
  • Data-centre capacity by city: Shows whether capacity is spreading beyond Mumbai and Chennai (Half-yearly · CBRE, JLL)
  • Cable fault and repair times on India's routes: Long repairs raise the value of route diversity (As reported · operators, TeleGeography)

For policymakers

Key learnings

  1. India has only about 1% of the world's cable landing stations, so more landing points and simpler permits are a precondition for its data-centre ambitions.
  2. Treating cable landings and data centres as critical infrastructure matters because both are concentrated in a few coastal cities.
  3. Spreading data centres to secondary hubs depends on inland fibre as well as land, power and water.

What to track

  • International cable capacity, lit and installed: Shows headroom before new cables are needed (148 of 193 Tbps lit at end-2024) (Annual · TRAI)
  • Cable landing station approvals: Measures progress towards more and more diverse landing points (As notified · DoT, TRAI)

India

India is served by 17 international subsea cables (end-2024) and has only about 1% of the world's landing stations, yet Mumbai took 94% of new data-centre supply in H1 2026, so connectivity and data-centre capacity are concentrated in the same coastal hubs.

Sources

  1. OECD Input-Output Tables 2025 edition, India 2022, OECD
  2. Price correlation, Material Insights, Material Insights (World Bank, FRED, IMF data)
  3. Industry map: Data centres and cloud, Material Insights (2026)
  4. Industry map: Telecommunications, Material Insights (2026)
  5. State of the Network 2026, TeleGeography (2026)
  6. India must build 10x more cable landing stations to compete in global data race: TRAI chief, Outlook Business (2025)
  7. CBRE H1 2026 report: India data center capacity hits 1.75 GW, set to cross 2 GW by year-end, CXOToday (CBRE data) (2026)