Company: GDHLF
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001410578-25-000935
Chunk: 239

Company: GDS Holdings Ltd
Filing Date: 2025-04-28
Form: 20-F
Item: Item 4
Chunk 239
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 whether or not the business operator is installing telecommunications circuit facilities (e. g., coaxial cables or optic fibers) and whether or not the scale and scope of areas of the installed telecommunications circuit facilities exceed the standard specified in the relevant MIC ordinance.

In sum, whether an operator of data center needs the TBA license depends on what it will do. The “ Manual to enter a Telecommunications Business (supplement)” issued by the MIC in 2005 (last amended in January 2023) (the “Manual”) lists a few examples of businesses as to whether or not they constitute a Telecommunication Business, which include the following examples:

(a)Lending a location to install servers:

If a party such as a real estate company sets up a building which has stable power supply facilities and earthquake-resistant facilities, and leases out a location where Telecommunications Business providers will install servers and the like, then it is merely lending spaces as a real estate business, and thus it would not be construed as telecom business. However, if the party procures telecommunications circuit facilities by itself and provides those facilities to users, then it would be construed that the party is reselling telecommunications services to users, and thus the party would be required to obtain the TBA license.

(b)Services lending servers or hosting services

If a party not only leases the servers or the capacity of the servers to users, but also provides a function which enables third parties to communicate (e. g., a function of sending or receiving e-mails by individuals through the servers), the party would also be construed as a party intermediating third party communications, and thus the party (i. e., the lessor of the servers or the capacity of the servers) would be required to obtain the TBA license.

Table of Contents

2. Electricity Business Act (denki jigyo ho)

(a)License requirement

It is assumed that the data center operator will purchase electricity from an electricity retailer and provide electricity to its users/tenants within the same location (“ Collective Purchase Scheme”). Provision of electricity under a Collective Purchase Scheme is not regulated under the Electricity Business Act (Act No. 170 of 1964) (the “ EBA”) and therefore no license is required under the EBA for data center operator to operate the Collective Purchase Scheme. However, the Guidelines for Electricity Retail Operations for Retail Electricity Business set out that, even if such provision of electricity is not regulated under the EBA, it is desirable for a data center operator that operates a Collective Purchase Scheme to put in place consumer protection