China’s carrier-neutral colocation market has been growing at a 30% to 40% compound annual growth rate in the past few years, higher than the overall growth rate of the IDC market in China, according to a report from DCD Intelligence.
“Inherent complexities involved in network interconnectivity in the country have led to bottlenecks as internet traffic has increased,” says DCD Intelligence analyst Hawkins Hua, the Shanghai-based author of the report.
“This has led to increased use of colocation facilities by enterprises wishing to bypass traditional interconnection routes. Although the market is still dominated by the state owned telecom carriers, there is a growing market of carrier-neutral providers who are proving popular with enterprises.”
Although dominated by the state owned telecom carriers - who between them represent two thirds of the colocation market in China - the country has witnessed an influx of carrier neutral colocation providers. Many of these are reliant on the state-owned giants for space and network provision.
Stringent regulations regarding foreign ownership of China-based companies - together with difficulties in establishing a business presence in the country - have to a certain degree prevented a mass influx of international colocation providers. However, multi-national providers are gaining a foothold in the market through strategic partnerships with local based companies.