Athub Revenue to Balloon Under Alibaba Deal to Build Five Data Centers
Tang Shihua
/SOURCE : Yicai
Athub Revenue to Balloon Under Alibaba Deal to Build Five Data Centers

(Yicai Global) May 15 -- Chinese e-commerce giant Alibaba Group Holding Ltd. has asked Shanghai Athub Co. to build and operate five data centers in a deal that could earn the provider over CNY8 billion (USD1.3 billion) a year.

The data centers are slated for delivery within 18 months of construction beginning, Athub said in a statement yesterday, without disclosing where the centers will be based or when the firm will start building them. Once the centers pass Alibaba checks, Athub will operate them for ten years.

Should Alibaba pay electricity costs for the centers directly, it will pay around CNY4 billion a year in service fees to Athub, the statement said, basing the estimate on earnings data from past partnerships with the Hangzhou-based firm. If Athub pays the bills, it will charge more than twice as much to cover the expenses.

The figures compared with an operating income of CNY520 million (USD81 million) last year, with 99 percent coming from service fees covering electricity expenses. It hopes the extended partnership will bolster its ties with Alibaba and give it a larger share of the data center market.

Athub will hold the deeds to each of the centers. It will organize all construction activities, invest in, build and operate dedicated systems for the centers' infrastructure and be responsible for hosting data, the statement added.

Editor: James Boynton

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Keywords: Alibaba , Data Centers , E-COMMERCE , Shanghai Athub