Converge inks deal for undersea cable system

MANILA, Philippines — Fiber broadband provider Converge ICT Solutions Inc. has signed a binding term sheet with Singapore-based Keppel Telecommunications & Transportation (Keppel T&T) to get capacity from a 15,000-kilometer undersea cable system and develop a branch that will land in Davao.

Keppel T&T’s wholly owned subsidiary, Keppel Midgard Holdings Pte. Ltd. (KMH), will grant Converge an indefeasible right of use (IRU) for one fiber pair on the main trunk of Bifrost Cable System, which directly connects Singapore to the west coast of North America.

Converge will also invest $100 million to jointly develop with KMH a branch on the Bifrost Cable System that will land in Davao.

Converge has likewise, been granted an IRU on the entire Davao branch.

Converge CEO Dennis Anthony Uy said the project with Keppel is an important milestone not just for the company, but also for the Philippines as it is expected to boost internet speeds and improve resiliency of its fast-growing fiber network.

“Our investment into one full fiber pair, connecting us to Singapore and the west coast of North America, will allow us to independently activate at will up to 15 Tbps of capacity to either country using the latest technology,” Uy said.

“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. We look forward to a continued strong collaboration with Keppel to bring our countries closer together and further enhance the connection of the region to the rest of the world,” he said.

To be jointly owned and developed with Keppel T&T’s partners, the Bifrost Cable System will be the largest capacity high-speed transmission cable across the Pacific Ocean when completed in 2024.

Spanning over 15,000 km, the Bifrost Cable System is 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.

It will connect Singapore, Indonesia, the Philippines, Guam, and the west coast of North America.

The Bifrost Cable System is seen boosting the connectivity of the region’s governments and businesses, including Cloud operators, telecommunications operators, network providers, over-the-top providers, data centers, governments, enterprises, and consumers by offering them competitive pricing and capacity resilience.

Keppel said completion of the proposed transaction with Converge is subject to negotiation and execution of definitive agreements and relevant regulatory approvals.

“We are pleased to partner Converge through Bifrost, which is a significant transnational infrastructure project, enhancing the inter-connectivity between ASEAN countries,” Keppel T&T CEO 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 centers, but also Converge’s data center business,” Pang said.

Converge has earmarked P20 billion for capital expenditures this year which will be used for the expansion of the its backbone and the deployment of additional fiber-to-the-home ports to reach approximately 35 percent of household in the country by December.

As the company achieves nationwide expansion by the end of the year, Converge is eyeing to reach 55 percent of Filipino households by 2025.