Keppel, Facebook to develop undersea cable linking South-east Asia and America

KEPPEL Telecommunications & Transportation (Keppel T&T) is partnering Facebook and Telkom Indonesia to jointly own and develop the Bifrost Cable System, a multiple fibre paired, high capacity submarine cable system, according to a joint statement on Monday.

Expected to be completed in 2024 and spanning over 15,000 kilometres (km), the Bifrost Cable System will connect Singapore, Indonesia, the Philippines, Guam and the west coast of North America. It is also expected to be the largest capacity high-speed transmission cable across the Pacific Ocean, passing through the Java Sea and the Celebes Sea.

The companies will appoint their subsidiaries - Keppel T&T’s Keppel Midgard Holdings (KMH), Telkom Indonesia’s Telekomunikasi Indonesia International (Telin), and a subsidiary of Facebook - to undertake the project. They have also appointed Alcatel Submarine Networks for the supply and installation works of the system.

According to Thomas Pang, chief executive officer of Keppel T&T, the project is in line with the company's Vision 2030 roadmap to develop and broaden Keppel's connectivity platform by building a new adjacent and complementary business to its data centre business.

The development follows the surge in demand for more bandwidth through the Pacific region due to the significance and the growth of Asian markets.

Said Kevin Salvadori, vice-president of Network at Facebook: "Connectivity is at the heart of our mission to give people the power to build community."

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Facebook is also partnering Alphabet's Google and Indonesian telecommunications company XL Axiata to build Echo, a second undersea cable system crossing the Java Sea.

Both Bifrost and Echo, which will need regulatory approval, follow previous investments by Facebook to build up connectivity in Indonesia, one of its top five markets globally.

The technology conglomerate said last year it would deploy 3,000 km of metro fibre in Indonesia across 20 cities in addition to a previous deal to develop public Wi-Fi hot spots.

According to a joint statement, the region's governments and businesses can expect to benefit from low latency and competitive pricing.

KMH's share of the total project costs will be about US$350 million. The project costs for the Bifrost Cable System will be paid progressively as the construction progresses. It is not expected to have any material impact on the net tangible assets per share or earnings per share of the company for the current financial year, said Keppel