Priciest real estate, backbone of digital world: What are carrier hotels?

From Skyfall to The Matrix, several Hollywood movies have talked about the concept of data centres and their crucial role in the daily operations of big corporates. Now, imagine a building that is key to maintaining data connectivity and telecommunications for top telcos like Verizon and AT&T and cloud services for Amazon and Google. In today's world, it would be at the heart of the operations of big corporates as well as their service to customers.

One such building, One Wilshire, located in downtown Los Angeles, recently became the most valued commercial property in the United States of America (USA), commanding a rate of $855 per square foot or $9,000 per square metre.

These buildings are called carrier hotels or colocation facilities. But what are these hotels, and why are they so important?

What are carrier hotels?

A carrier hotel is an interconnected urban data centre and hub for networks and cloud services in the world's major cities. Tech companies install their equipment in these buildings and connect to internet exchanges and cloud platforms, which then operate their telecommunications and data centres across the globe.

These buildings serve as anchor points for high-speed fibre optic cables. One can find rows of servers, switches, and routing equipment within their walls. The servers here store, process, and transfer the data we send and receive over the Internet.

Carrier hotels serve as the backbone of today's digital world. They allow companies to exchange data faster and with lower latency. They are allotted separate suites, and interconnection occurs through a meet-me-room.

What is a meet-me-room?

A meet-me-room (MMR) is a secure data centre room allowing companies to connect to one or multiple carriers. It enables internet service providers (ISPs), cable companies, cloud service providers, and other tenants to cross-connect.

A typical MMR has cabinets and racks with the tenant's hardware for fast data transfer. These rooms allow ISPs and organisations hosted in the same data centre to connect, enabling them to exchange data physically.

The data transfer here is cheaper and more secure.

Why do companies opt for carrier hotels?

Located mostly in key cities, the carrier hotels allow the companies to collect, process and then route the data in one place. These companies can also provide their data services to other businesses.

Moreover, it allows the companies to avoid failures in an emergency as the carrier hotels have multiple power sources and internet connections.

One Wilshire, for instance, has five separate utility power risers and 11 on-site power generators. In case of a power failure, the building has enough fuel for these power generators to last 24 hours.

Moreover, these buildings also allow customers to choose the best-suited provider for their needs. 

Who owns carrier hotels?

A carrier hotel is generally run by large management companies maintaining close relationships with carriers and providers for connectivity. They provide large spaces to the Service Providers or Enterprises, and in turn, their tenant builds out their data centre inside these hotels.

Where are the biggest carrier hotels located?

The biggest carrier hotel in the world is Telehouse West, located on Coriander Avenue in London. It also has data centres in Hong Kong, Paris, Frankfurt and New York.

It is followed by Equinox SG3 in Ayer Rajah Crescent, Singapore and Equinix PA2 in Saint-Denis, France.

Other big names in the international industry are Interxion Zuri in Switzerland and Global Switch in Sydney, Australia.

Are there carrier hotels in India?

Although the companies can easily use carrier hotels located on other continents as they are densely connected, ST Telemedia or STT, has established several data centres in Mumbai. One of their facilities is located in Prabhadevi, one in Andheri and another in Bandra Kurla Complex.