A visitor looks at a Porsche car meant to represent the speed of a 400 Mbit/s Internet connection at the 2016 CeBIT digital technology trade fair. (Photo : Getty Images)
China's largest content delivery network company announced that it will buy a South Korean rival that is operating in a dozen of countries. This makes the country on the course to rival the Internet speeds of the United States.
Wangsu Science & Technology Co. announced that its Hong Kong unit had signed an agreement for acquiring about 97.82 percent of CDNetworks from Japan's KDDI Corporation for $185.72 million.
A content delivery network (CDN) is a collection of global servers that optimize Internet speeds by allowing users to get data from the closest server instead of the origin.
The move will give a global presence to Wangsu and narrow its gap with Akamai Technologies of the U.S., the world's largest CDN company. Akamai is reported to have generated a revenue of $2.3 billion last year.
Wangsu was founded on Jan. 26, 2000. Its headquarters is currently stationed in Shanghai.
CDNetworks on the meanwhile is based in Seoul, and a major player in the field with more than 180 nodes and 10,000 servers worldwide, covering 98 cities in 49 countries overall.
The company is ranked first for South Korea's overall market share, third in Japan, and boasts a lot of high-profile clients such as Texaco, Dell, Ebay, Hyundai and Samsung.
China's CDN providers are currently occupying a very small portion of the global market despite their dominance at the mainland.
Akamai holds 41 percent of the total market share, Amazon CloudFront has about 12 percent and Wangsu accounted to only 3.4 percent of the total market share, according to a mainland report on the world’s 1,000 leading websites that use CDNs.
According to a report by Dongxing Securities, CDNs would become increasingly popular in China given the skyrocketing demand in short video and video streaming.
The Global Times reported that Wangsu may also acquire a 70 percent share of CDN-VIdeo, a Russian CDN Provider that operates 400 servers worldwide. The report said that Wangsu would be offering $7.4 million for the Russian company.
