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Colt Telecom is planning to set up a 210,000 sq ft data centre at a former Somerfield site in Welwyn Garden City.
Colt Telecom has raised £400m in a share issue to finance the expansion of its European network of internet hosting centres.
Colt Telecom is planning to double its number of internet hosting centres to 20 this year and will set up fibre-optic city networks in Manchester, Valencia, Lisbon, Copenhagen and the Hague.
Colt Telecom is forming an alliance with Hewlett-Packard to set up 20 Colt e-business centres across Europe, which will offer web hosting and application service provision.
Colt Telecom has raised a further £700m in a share placing, in order to fund the expansion of its inter-city telecoms network and to set up a further 20 web-hosting centres.
Colt Telecom has acquired Imaginet, the French internet service provider, for £12m.