SINGAPORE (THE BUSINESS TIMES) – A wholly-owned subsidiary of Keppel Telecommunications & Transportation (Keppel T&T) will grant Philippine-listed Converge Information & Communications Technology Solutions capacity on the Bifrost Cable System.
In an exchange filing on Wednesday (APRIL 21), Keppel Corp said the subsidiary, Keppel Midgard Holdings, signed a binding term sheet with Converge to grant the fibre broadband provider an indefeasible right of use (IRU) for one fibre pair on the main trunk of the subsea cable system.
The Bifrost Cable System directly connects Singapore to the west coast of North America via Indonesia through the Java Sea and Celebes Sea.
Keppel Midgard and Converge will jointly develop a branch on the Bifrost Cable System that will land in Davao, the Philippines. Converge will be granted an IRU on the entire Davao branch and will be engaged as a landing party for the branch segment.
Converge will invest over US$100 million (S$132.9 million) in the project, which is expected to “significantly increase” Internet speeds and network diversity for businesses and consumers in the Philippines, Keppel Corp said.
Converge chief executive Dennis Anthony Uy said the investment into one full fibre pair will allow the company to independently activate at will up to 15 terabits per second of capacity to either country using the latest technology.
“Furthermore, our ongoing construction of our National backbone spanning the whole country will allow Converge to distribute this capacity from Davao to any point in the Philippines,” he added.
Keppel T&T chief executive Thomas Pang said, “Through this partnership, we will be able to accelerate the growth of our connectivity platform, which is in line with Keppel’s Vision 2030, as well as explore synergies with not only Keppel’s data centres, but also Converge’s data centre business.”
Keppel Corp said the completion of the proposed transaction with Converge is subject to negotiation and execution of definitive agreements and relevant regulatory approvals.
The Bifrost Cable System – which Keppel T&T is undertaking with its partners, Facebook and Telin – is expected to span over 15,000 kilometres after its estimated completion in 2024. It is expected to be the largest capacity high-speed transmission cable across the Pacific Ocean when completed and will bolster Singapore’s role as a digital hub for the region, Keppel Corp said.
Shares of Keppel Corp closed at $5.45 on Tuesday, down $0.07 or 1.3 per cent.