China Mobile Hits Pause on Silicon Valley Data Center

Robert Clark
News Analysis
Robert Clark
11/5/2019

China Mobile's global expansion plans have become ensnared in the US-China tech war.

It seems to have put on hold its plans to build a self-owned 243,000 square-foot data center in Silicon Valley -- the first in the US by a Chinese telco.

Its new London data center, originally set to open in October, will go into service by the end of the year.

In the past five years the Chinese telco, the world's largest by customer numbers, has been ramping up its offshore business in the face of a flat domestic market.

The company website shows a planned network of 15 data centers worldwide, including the major Internet hub of Ashburn, Va., as well as Sydney, Toronto and Johannesburg.

Executives have said China Mobile aims to earn 10% of gross income from international operations by 2023.

But it faces stiff headwinds in the US. Earlier this year the FCC rejected its application to carry phone calls to and from the US.

China Mobile currently has no US assets. Its two domestic rivals, China Unicom and China Telecom, offer colocation services from US data centers but face calls to be barred on security grounds.

Two years ago, China Mobile International (CMI), the telco's global wholesale and enterprise arm, acquired a San Jose site for $11 million and applied for approval to build a data center and five-storey office block.

It said it expected the new facility, at 6320-6340 San Ignacio Avenue, would be operational by December 2020 -- approximately the same time that its trans-Pacific 16,000km BtoBE cable is due to come into service.

But in an email to Light Reading, CMI now says the data center is "still in the planning stage."


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The project is already well beyond that. It has been approved and demolition of the existing office block has begun.

The company won't comment on the project's future, but, if it isn't allowed to carry phone calls to the US, it is difficult to see how it can get a green light for a big data center.

It does not help that non-Chinese firms are denied access to the China data center market except with a local partner.

Outside the US, the company is on a growth path.

Three months ago, it opened its first data center outside China, a 188,000 square-foot Tier III facility in Singapore, to help meet "enormous customer demand."

Following the opening of the London data center, it plans to build another facility in Frankfurt.

It is an investor in seven existing major subsea cables and, besides working on the BtoBE (a co-investment with Facebook and Amazon), is now building a cable between Singapore and Japan in partnership with Facebook and several Asian telcos.

— Robert Clark, contributing editor, special to Light Reading

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