What’s Driving Digital Infrastructure Growth in Emerging Markets?

Expanding mobile device use in remote areas of APAC creates demand for low-latency connectivity

Cyrus Adaggra
What’s Driving Digital Infrastructure Growth in Emerging Markets?

The world now feels much smaller, thanks to how quickly most of us can connect with people and businesses globally. Yet the opportunity to make digital services available to millions, even billions, who don’t currently have access is significant. From a regional perspective, digital infrastructure may be expanding rapidly across the Asia-Pacific (APAC) region, but you’ll find that it’s currently concentrated in a handful of major cities.

Residents living in remote or rural areas throughout the APAC region rely primarily on mobile phones for connectivity. These devices deliver a range of digital services that can help propel them to a higher socioeconomic status, increase their standard of living and shrink the digital divide. Accessing digital services in emerging markets requires low-latency connectivity that can only be achieved with digital infrastructure.

The demand for digital infrastructure in the APAC region is currently surpassing the supply. Governments in these expanding economies realize they need the necessary infrastructure, mobile phone towers, fiber networks and data centers to attract multi-national companies to enter and expand economic activity in their countries. They are now proactively developing foreign investment-friendly policies that make it easier to make infrastructure investments that ensure the availability of digital services.

The Global Interconnection Index (GXI) 2024, a market study published by Equinix, reports that APAC already has the fastest-growing core interconnection bandwidth and edge metros globally. This will only accelerate as more data centers are built, enabling businesses to offer their products and services to these fast-growing markets. It’s especially significant for enterprises that are only operating in mature markets and looking for opportunities to grow by reaching new customers.

Emerging markets are prevalent across APAC

The Asia-Pacific region is unique with its vast geographic size and massive population. Here are a few facts that may surprise you:

  • The continental U.S. could fit inside Australia, and it has less than 1% of the region’s total population, which is around 3 billion.
  • China has 1.4 billion residents, India has 1.4 billion and Indonesia has over 300 million.
  • In Thailand, 50 million people live in remote villages compared to 30 million in metro areas. In the Philippines, 100 million residents live on one of 2,000 islands.
  • The APAC region spans seven time zones.
  • If you were to take a flight from Melbourne to New Delhi, your flying time would be about 13 hours.
  • The top 3 manufacturers of semiconductors globally are all in the APAC region (Taiwan, South Korea and China)

What’s interesting about this region is the number of people who have never used laptops or landlines but instead went straight to using mobile devices. Dial-up or fiber internet is not in their vocabulary; they’ve only experienced the internet on their phones. Their phones are a lifeline to everything digital—from messaging and social media to ride-sharing services and delivery apps, to online platforms for making retail purchases.

As residents in APAC countries continue gaining access to more affordable, locally manufactured phones paired with inexpensive mobile data, it’s driving a surge in the digitalization of emerging markets. This is increasing demand for building more agile digital infrastructure that integrates consumers and enterprises with interconnected ecosystems and economies.

Barriers to digital infrastructure expansions vary from one country to another

Expanding digital infrastructure services in emerging markets is a win-win for residents and businesses, but challenges exist. We’ve found that every country is unique in how they approach making digital infrastructure more accessible. Here are a few examples of obstacles across the region:

  • Insufficient availability of land and power in the right metropolitan locations
  • Complicated approval processes for licenses and certifications
  • Requirements to share ownership of data centers or extend partnerships to local providers
  • Limiting the ability of foreign corporations to acquire land

Overcoming these challenges requires strategic thinking, long-term planning, collaboration with local authorities and a market-specific approach.

How to approach and assess expansion opportunities

The APAC region has diverse opportunities for supporting the development of emerging markets with digital infrastructure. Digitization can help make people’s lives better. Providing internet access to people in rural villages immediately improves their quality of life through access to better education and health care. It also connects people with each other and the world at large.

At Equinix, we take a thoughtful and customer-centric approach when deciding where to expand our data center platform. We think hard about entry strategies and what our customers need from our global network of data centers.

There’s no standard playbook since each market can be so different, which means we must answer many questions when exploring a new location:

  • Which markets represent the best opportunity to make an impact?
  • Where do our customers want to expand their digital infrastructure?
  • How fast do we want to be up and running?
  • What are the criteria for developing the optimal market entry strategy?
  • Do we need a partner in the local market?
  • How do we attract global and regional cloud and network service providers to host their services in our facility?
  • How can we help our customers understand the market and the opportunity for deploying digital infrastructure?

We also strive to remember that what has worked in one country might not work in another. Using a cookie-cutter approach will not solve country-specific challenges and barriers to entry. For instance, in India, we acquired a business and used it as a cornerstone to expand quickly. In Indonesia, we’re building an organic business with the assistance of a local partner who’s helping us manage the country’s nuances and challenges.

There are other ways to expand our footprint in emerging markets, such as modifying an existing building to meet our specifications. Or we may build from the ground up when it’s feasible to acquire land and adequate power to meet our operational requirements.

Importantly, we must be able to provide a globally consistent service for our customers whether they’ve deployed digital infrastructure in Silicon Valley, Kuala Lumpur or Mumbai, while being intentional about how to best meet the needs of the local market. We’ve already established Equinix IBX® colocation data centers in Australia, China, Hong Kong, India, Japan, Korea and Singapore. Recent expansion includes establishing a presence in Indonesia and Malaysia, specifically in Jakarta, Kuala Lumpur and Johor.

Once we open our doors in these new locations, it will create opportunities for global businesses to expand to these countries and make it possible for in-country companies to expand globally. We look forward to serving our customers in these emerging markets over the coming years.

To learn more about where we currently have Equinix IBX data centers in the APAC region, visit our website today.

Cyrus Adaggra VP, Corporate Development
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