China Unicom Launches Cloud Computing Joint Venture

Carrier China Unicom has launched a joint venture with a computer data processing provider in bid to take a slice of the next-generation computing market.

Yunji Intelligence Co. Ltd. was officially unveiled in a media event on Thursday — four months after China Unicom and Shanghai-based Wangsu Science and Technology Co. Ltd. announced the deal.

The joint venture has registered capital of 500 million yuan ($74 million), with China Unicom and Wangsu each taking a 42.5% stake and a Xiamen, Fujian province-based investment company taking the other 15%, according to public company records.

Yunji Intelligence will focus on the content delivery network (CDN) business, said Wen Ningrui, a former China Unicom executive who is president of the joint venture.

CDN providers help companies and developers reduce latency — the time it takes a device to respond to other devices over a network — by delivering content based on the location of the user. This type of data processing technology is also known as “edge computing.”

With the tie-up with Wangsu, one of the earliest players in the industry, China Unicom is hoping to get a piece of a market projected to grow from $9.6 billion in 2018 to $70.7 billion globally by 2026, according to Reports and Data.

Wangsu was founded in 2000 and listed in Shenzhen in 2009. In recent years its CDN business has facing mounting challenges from tech giants such as Tencent Holdings Ltd., Alibaba Group Holding Ltd., and Huawei Technologies Co. Ltd.

For the third quarter of last year, Wangsu reported revenue of 1.57 billion yuan, up 16% year-on-year, and profit of 164 million yuan,

Contact reporter Mo Yelin (yelinmo@caixin.com)