India's telcos are adopting a very cautious approach towards the virtualization of their networks. But those with substantial data center facilities clearly enjoy an advantage over others.

As well as being able to offer more compelling value-added services to their customers, these players may be more strongly placed to adopt New IP technologies such as SDN and NFV, which promise efficiency gains as well as greater service agility. That's because the move towards SDN and NFV means some functions that used to reside on the network are gradually moving into the data center.

That could put Reliance Communications Ltd. in pole position. With 11 data centers covering around 650,000 square feet, it is easily the country's largest provider of data center facilities and hopes to double its capacity to 1.2 million square feet in the next few years.

Although it lags RCom by some measure, Bharti Airtel Ltd. (Mumbai: BHARTIARTL), India's biggest operator, is also in a good position, with around 164,000 square feet of floor space in the cities of Noida, Chennai, Bengaluru, Pune, Manesar, Bhubaneshwar and Mumbai. Bharti Airtel is one of the few telcos to have already incorporated virtualization into its network strategy: It plans to make investments in this field as part of its recently announced $9 billion network modernization initiative, called Project Leap. (See Bharti's $9B Network Splurge in India.)

Meanwhile, Bharat Sanchar Nigam Ltd. (BSNL) , one of India's state-backed operators, has outsourced the management of data centers in Ahmedabad, Faridabad, Ghaziabad, Hyderabad, Ludhiana, Mumbai and Jaipur to Dimension Data , a South African IT company that is now owned by Japan's NTT Group (NYSE: NTT). But BSNL also set up a new business called BSNL Internet Data Center earlier this year when it launched a new data center in Hyderabad. The company has been reporting losses and may be looking to diversify in the data center business.

Idea Cellular Ltd. , India's third-biggest operator, is another telco that has outsourced data center requirements -- in its case to IBM -- while number-two player Vodafone India recently announced plans to spend about 10 billion Indian rupees ($150.7 million) on setting up another data center in India. The company already has one facility in Bengaluru and another in Pune.

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But the big threat is likely to come from greenfield operator Reliance Jio , which is set to launch 4G services in India soon. RJio has already "operationalized nearly half a million square feet of its own next-generation cloud data centers," said Mukesh Ambani, the chairman of parent company Reliance Industries Ltd. (RIL) , in his annual address to shareholders. (See Is It Advantage RJio in Virtualization Race? and India's RJio to Launch 4G in 10 Circles by End-2015.)

Because RJio lacks any legacy infrastructure, the adoption of new technologies like SDN and NFV is a more obvious move for it than for India's other telcos and one that is likely to be less problematic. But if its New IP credentials are quickly seen to give RJio a big advantage over rivals, investments in SDN, NFV and data center capabilities could accelerate.

— Gagandeep Kaur, contributing editor, special to Light Reading