Data centres emerge as the fastest-growing segment in India's enterprise telecom market

Frost & Sullivan expects enterprise telecom revenues to approach ₹954 billion by FY2030 as organisations increase spending on digital infrastructure services.

Third-party data centre services are set to become the fastest-growing segment of India's enterprise telecom market, outpacing enterprise connectivity, mobility and cloud communication services as organisations expand investments in digital infrastructure, according to Frost & Sullivan's latest India Enterprise Telecom Tracker.

The research firm expects India's enterprise telecom market to approach ₹954 billion by FY2030, driven by growth across data centre services, enterprise mobility, enterprise data services and cloud communications.

Among these, data centre services are projected to emerge as the largest growth opportunity, reflecting changing enterprise technology priorities around infrastructure, scalability and digital operations.

"The enterprise telecom buying in India is shifting from standalone connectivity procurement to outcome-based network services," said Swathi Arunaa, principal consultant, ICT growth advisory at Frost & Sullivan.

According to the firm, enterprises are looking for integrated connectivity across cloud environments, data centres and edge infrastructure to support business applications, improve performance and deliver operational outcomes.

Third-party data centre services segment to grow at a 21.9 percent CAGR through FY2030, reaching ₹379 billion. The report attributes this growth to ongoing investments in digital infrastructure, rising adoption of hybrid IT environments and increasing demand from enterprises looking to modernise technology operations.

Large organisations continue to expand data centre consumption as part of broader infrastructure strategies, while small and medium businesses are increasingly embracing cloud-based operating models to improve collaboration, customer engagement and scalability.

The enterprise data services segment is forecast to reach ₹223 billion by FY2030, growing at a 3.9 percent CAGR. While internet services continue to account for the largest share of the segment, Frost & Sullivan expects stronger demand for Internet Leased Lines (ILL), IPLC/DLC services and SD-WAN as organisations seek greater network performance, flexibility and cost efficiency.

Enterprise mobility is projected to reach ₹188 billion by FY2030, expanding at a 5.9 percent CAGR. Within the category, machine-to-machine (M2M) connectivity is expected to record the fastest growth, supported by increasing adoption of connected devices and enterprise IoT deployments.

Cloud communications gain momentum as legacy voice declines

The report also points to continued expansion in cloud-based communication services. It expects the cloud communications market to reach ₹131 billion by FY2030, growing at a 9.6 percent CAGR. Although Communications Platform-as-a-Service (CPaaS) currently accounts for the largest share of revenue, Unified Communications-as-a-Service (UCaaS) and Contact Centre-as-a-Service (CCaaS) are forecast to grow at a faster pace as organisations increase investment in collaboration platforms and omnichannel customer engagement strategies.

At the same time, traditional fixed-line voice services are expected to continue their long-term decline. The segment is projected to fall to ₹33 billion by FY2030, representing a 2.8 percent CAGR decline, as enterprises migrate from legacy voice infrastructure towards cloud-based communication environments.

According to Frost & Sullivan, the transition from ISDN to SIP trunking remains the dominant shift within the fixed voice market. SIP services are expected to become the largest component of the fixed voice segment as organisations deploy Cloud PBX, hosted communication services and unified communications platforms.

Growth is shifting towards data centres, cloud communications and managed infrastructure services, while traditional connectivity and voice services lose momentum.