KDDI splurges $1bn on North America datacentre expansion
By Yanitsa Boyadzhieva
Jun 23, 2023
- Japanese operator KDDI wants to be a leader in the digital transformation era
- It has been expanding its datacentre portfolio globally
- And has boosted its presence in North America with a $1bn acquisition in Canada
Japanese telco KDDI has agreed to buy a portfolio of Canadian datacentre assets from Allied Properties REIT for CAN$1.35bn (US$1bn) in a bid to enhance its presence in North America and expand its international business opportunities.
In a brief statement announcing the move, KDDI said that the deal will see it enter Canada for the first time through the acquisition of the country’s “top interconnection” datacentres. According to a statement from Allied Properties, three Toronto-based facilities are included in the deal.
One of the datacentres in Canada to be acquired by KDDI from Allied Properties REIT.
The move matches the telco’s mid-term management strategy for 2022-24, which puts digital transformation (DX) as one of five focus areas for its growth ambitions.
“With the datacentre business being one of the core parts of DX, KDDI aims to expand interconnection datacentres as places where customers, such as content providers, cloud service providers and telecommunication carriers, connect with each other and create new value,” the company stated.
Alongside the takeover, the Japanese telco has decided to establish a new subsidiary, KDDI Canada, to manage the Canadian datacentres.
The operator noted that datacentres are “increasingly important for realising a digital society” and that it wants to ensure it is a significant player in the growing datacentre market. The team at Synergy Research Group estimates that ongoing increasing demand for additional datacentre capacity will lead to the construction of hundreds of major datacentres in the coming years, resulting in almost 1,200 hyperscale datacentres globally by the end of 2026 – see How many hyperscale data centres does the world need? Hundreds more, it seems.
The new facilities in Canada add to KDDI’s existing US-based North American datacentre portfolio – two in New York City and one in Los Angeles – which, along with the telco’s other international datacentre operations, are run under the Telehouse brand.
Currently, KDDI’s portfolio of datacentre facilities are located mostly across Asia and Europe (with ten locations in each of these regions). With the new additions, its global datacentre business will comprise facilities at 26 locations.
The company claims that its London operation has the largest number of connections in the world. Last year, it invited the media to showcase a revamped version of one of its facilities in the UK capital city – see Big in London: Telehouse splashes more than £223 million on revamped datacentre.
- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV