Chayora set to go live with $1.5B China data center

As China and foreign business relations worsen almost daily, telecom infrastructure in China wouldn't seem the most auspicious business.

But privately held Chayora has defied the trend to boldly go where few foreign firms have ventured.

It's about to open its first data center in Tianjin, built at a cost of around $1.5 billion, with plans for further facilities in Shanghai and southern China.

CEO Oliver Jones estimates Hong Kong-headquartered Chayora is one of just half a dozen foreign companies to hold IDC and ISP licenses in China.

But it hasn't come easy. Jones had the idea nearly ten years ago and co-founded the company in 2012.

His insight was that China's information security law requiring domestic data to be held onshore had created an unsatisfied demand for data center services that met the needs of foreign business.

His pitch has appealed to investors. Chayora's latest external funding round, completed in October, raised $180 million from UK investment firm Actis, which now holds 63%.

Jones says Chayora's aim is to offer data center services as close as possible to those offered anywhere else in the world.

"We are transparent and auditable, and make everything to international standards. The operational regime is world class, which is often a big challenge in China."

He likens it to an international hotel chain, providing the same familiar experience in every location. "You know exactly what you are going to get when you arrive, regardless of the country you are in."

But he said that while acquisition of the licenses was important, the negotiations with various levels of government over land, water, planning and power were also critical and time-consuming.

Discussions over electricity supply for the 300MW Tianjin facility were especially complex, involving local, provincial and national governments, he said.

The first stage of the 32-hectare site, about 100km from Beijing, will open in three months.

Chayora is finalizing agreement with the Shanghai city government over a site just north of Pudong. Construction will start by the end of the year, Jones expects.

He's also planning a third site in Guangdong, most likely between Shenzhen and Guangzhou, and possibly a second in Shanghai.

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Chayora signed a partnership deal with Telstra in January, in which the Australian telco is its colocation and network management partner.

"It's a very good tie-up for us. Telstra has some great international customers and some very great network skills."

The Tianjin center will offer customers the choice of seven telcos – the three big state-owned firms, Citic ASP, Dr Peng, Sinnet and Telstra, Jones said.

It is intended to be both carrier-neutral and cloud-neutral, connecting to the big domestic providers such as AliCloud and Tencent Cloud, as well as AWS, Azure and other foreign players.

Jones said Chayora is primarily targeting hyperscale companies and big foreign-invested businesses in China.

He also spies opportunity from some big Chinese content and cloud companies, such as TikTok parent ByteDance and software player Kingsoft.

— Robert Clark, contributing editor, special to Light Reading