On 29 March 2021, Keppel Telecommunications & Transportation (Keppel T&T), through a wholly owned subsidiary, Keppel Midgard Holdings (KMH), Facebook and Telin entered into a joint build agreement to jointly own and develop the Bifrost Cable System, the world’s first subsea cable system that directly connects Singapore to the west coast of North America via Indonesia through the Java Sea and Celebes Sea.

Expected to be completed in 2024, the Bifrost Cable System will span over 15,000 km and connect Singapore, Indonesia, the Philippines, Guam and the west coast of North America. When fully commissioned, the multiple fibre paired, high performance Bifrost Cable System will also be the largest capacity high-speed transmission cable across the Pacific Ocean.

KMH’s share of the total project costs as a joint build partner will be approximately US$350 million (approximately $467 million). Keppel T&T, Facebook and Telin have appointed Alcatel Submarine Networks for the supply and installation works of the cable system.

Mr Thomas Pang, CEO of Keppel T&T, said, “One key component of Keppel’s Vision 2030 is our connectivity business. With the development of the Bifrost Cable System, we take a significant step towards strengthening and broadening our connectivity platform by building a new adjacent and complementary business to our data centre business.

“We are happy to collaborate with our consortium partners, Facebook and Telin, for the Bifrost Cable System project as this will be a transnational critical infrastructure which will enhance Singapore’s role as a digital hub, as well as support and accelerate the region’s growing digital connectivity needs. In line with Keppel’s asset-light model, we can also collaborate with funds managed by Keppel Capital to help provide funding for the project.”

With global data bandwidth demands reaching unprecedented levels, surging cloud adoption, exponential growth in mobile device usage and 5G deployment, the surging demand for more bandwidth highlights the critical impact subsea cables have on global connectivity. In addition, there has been an increasing demand for more capacity through the Pacific region due to the significance and the growth of Asian markets. In Asia Pacific alone, according to the Cisco Annual Internet Report (2018 – 2023), the number of internet users is expected to hit 3.1 billion users by 2023, from 2.1 billion users in 2018.

This open cable system will cater to the burgeoning connectivity needs of the Southeast Asia region by providing not only seamless direct connectivity to North America, and low latency, but also network diversity.

The Bifrost cable system will incorporate state-of-the-art optical submarine transmission equipment, benefitting the region’s governments and businesses, including cloud operators, telecommunications operators, network providers, over-the-top (OTT) providers, data centres, governments, enterprises, and consumers by offering them competitive pricing and capacity resilience.

FBO licence
In addition, in April 2021, KMH was granted a Facilities-Based Operator (FBO) licence by the Infocomm Media Development Authority of Singapore (IMDA). The FBO licence will allow KMH to own, maintain and operate telecoms infrastructure in Singapore and to provide telecommunications services in connection with the Bifrost Cable System.

Mr Pang added, “Securing the FBO licence is an important milestone for Keppel as it marks the start of our subsea cable business in Singapore. The Bifrost project is in line with Keppel’s Vision 2030 roadmap, which includes growing our connectivity platform, and will strategically strengthen and broaden the Group’s play across the spectrum of data communications, from network infrastructure, data centres to wireless 5G connectivity. It can give rise to potential opportunities for cross selling or creating new profit pools across Keppel’s different connectivity businesses, for example by leveraging Keppel Data Centres’ network of data centres as potential points of presence. We may also collaborate with funds managed by Keppel Capital to help provide funding for the project. Drawing from our experience in Bifrost, we will also explore other opportunities in subsea cables.”

Binding term sheet with Converge
KMH has subsequently signed a binding term sheet with leading Philippine fibre broadband provider Converge Information & Communications Technology Solutions, Inc. (Converge) to grant Converge an Indefeasible Right of Use (IRU) for one fibre pair on the main trunk of Bifrost Cable System.

In addition, KMH and Converge will jointly develop a branch on the Bifrost Cable System that will land in Davao, Philippines, with Converge also being granted an IRU on the entire Davao branch. Converge will be engaged as the landing party for the Davao branch segment.

The additional branch will significantly increase internet speeds and network diversity for businesses and consumers in the Philippines. Converge will invest over US$100 million (around PhP5 billion) for the whole project.