STT invests in China data centre operator
Source: Irene Tham, AsiaOne, MONDAY, AUG 04 2014
TEMASEK Holdings' Singapore Technologies Telemedia (STT) has acquired a 40 percent stake in China's GDS Services, marking its first foray into the booming data centre business there.
The investment of an undisclosed sum makes STT the single largest stakeholder in GDS, one of the largest data centre operators in China, STT said in a statement.
GDS, which has been in business for over 10 years, runs 17 data centres in China and Hong Kong providing mission-critical IT services to financial institutions, multinational corporations and government agencies.
Other GDS shareholders include China-based venture capital firm SB China Venture, Capital and United States-based financial institution International Finance Corporation.
STT executive directors Siot Tat Hiang said: "China's data centre market, particularly in the top-tier carrier-neutral segment, is experiencing tremendous growth."
STT wants to capitalise on the growth there.
Market research firm Frost & Sullivan has forecast that the Asia-Pacific data centre service market will reach US $9 billion (S$11.2 billion) by 2017, from US $2.5 billion in 2010.
China will account for more than one-third of the market in 2017.
Close to half of China's 1.4 billion population use the internet for everything from shopping to playing games and connecting with friends on social networks.
STT's investment in China will help expand its global footprint to support the needs of high-growth blue-chip customers.
Also in STT's investment portfolio is US-based Level 3 Communications, which owns and operates more than 350 data centres throughout North America, Latin America and Europe.
STT previously invested in two US-based data centre operators, Equinix and Savvis, which is now known as CenturyLink Technology Solutions. But STT sold its stakes in the two firms in 2005 and 2011 respectively.
"STT intends… to become a globally recognised owner, operator and investor in the data centre sector," said Mr Sio.