Terremark to launch colocation subsidiary

By Rich Miller
CarrierHotels News Staff

June 28, 2000 -- Miami-based carrier hotel firm Terremark Worldwide, Inc. has formed ColoConnection, Inc. to offer colocation services, the company said today.
The new subsidiary is already negotiating for sites in Northern Virginia, San Francisco and New York and plans to be operational by the November 1.
ColoConnection plans to lease up to 50,000 square feet in Terremark "T-Rex" sites or other carrier hotels and equip the space to house telecommunications equipment, and license the finished space to smaller carriers, Internet service providers and hosting companies.
The colocation effort differs from Terremark's core carrier hotel business, in which tenants typically lease large blocks of space and finish it themselves to their own specifications.
"The co-location business is a logical step for Terremark," said Wayne Allen, President of ColoConnection, Inc. "We plan to take full advantage of our T-Rex locations and use our own construction company to manage the complex build-out of our facilities. ColoConnection also hopes to develop relationships with its tenants that will help generate opportunities for other Terremark telecommunications businesses."
Demand for colocation space will grow rapidly, according to Terremark, which cites data from Cahners In-Stat Group predicting that revenues for Internet service providers (ISPs) are expected to increase almost eight fold from $8.3 billion in 1998 to $63.6 billion in 2002.
In addition to the sites currently under negotiation, ColoConnection plans to expand its brand of colocation to many of the T-Rex hotels being built by its sister company and to other strategically located carrier hotels in key cities.
"The colocation business will play a key role in Terremark's business strategy going forward," said Manuel D. Medina, Chairman and CEO of Terremark. "We see co-location as the ground floor of a vertically integrated telecommunications company and a key component of our emerging market strategy.''
ColoConnection, Inc. is 80% owned by Terremark with the balance held by Allen and other key Terremark employees who will be working closely with him to build the ColoConnection business.