Time dotcom And Facebook Invest in APG
Malaysian broadband operator Time dotCom (TdC) has joined the consortium that is building the new trans-Pacific fibre-optic submarine cable system, Asia Pacific Gateway (APG). The investment builds on the company's recent acquisition of Global Transit and provides further evidence of the operator's plans to reinvent itself as a key provider of regional broadband capacity and advanced services. Furthermore, TdC's announcement has inadvertently disclosed the fact that US-based Facebook has also invested in APG, signalling that company's interest in Asia's growing social networking market.
In a filing submitted to the Kuala Lumpur Stock Exchange, TdC states that it will invest US$45mn to establish a Malaysian landing station for the new cable as well as providing local construction and maintenance services. The 8,000km cable which will directly serve the North East Asian markets of Hong Kong, South Korea, Taiwan and China, as well as Japan and the South East Asian markets of Malaysia, Singapore, Vietnam and Thailand, has a total design capacity of 54.8Tbps. Data transmission rates of 40Gbps per wavelength (upgradable to 100Gbps) will be offered when the cable enters service in mid-2014.
|Maturing Asian Markets Interest Facebook|
|Regional Asian Penetration Rates|
BMI forecasts continued robust growth in fixed and mobile broadband adoption in the South East and North East Asian region as local and national governments, as well as state- and privately-owned telecommunications operators invest heavily in the deployment of infrastructure designed to boost productivity and efficiency in pursuit of strong economic growth. The APG cable system is just one of a number of Terabit-class cables that have been, or are planned, to be laid across the region, including the Google-backed Unity and South East Asia Japan Cable (SJC) projects.
As an owner and operator of Tier 1 infrastructure in Malaysia, and with ambitions of credible developing data centre and managed service businesses, the 3.4Tbps capacity Time dotCom will gain through this investment will be invaluable in differentiating itself from its main rival in the infrastructure and wholesale markets, incumbent Telekom Malaysia. The investment follows naturally on from the company's purchase of three bandwidth service providers - including Global Transit - for US$110mn in Q411. ( See our online service 'Time Is Right For Regional Data Venture', November 23 2011.)
Facebook, meanwhile, is known to be seeking expansion opportunities in Asia where local social networking brands are providing significant competition for online advertising and daily users. It is reported that around 195mn of Facebook's global user base of 850mn are based in Asia. This figure is growing rapidly and it makes sense for Facebook to directly own and control capacity on the principal data conduits serving the largest markets in the region. Facebook is known to buy or lease capacity on other cable systems, but it is more cost-effective for the company to manage its bandwidth resources directly. This move could presage Facebook's investments in other cable systems around the world (if it has not already done so - the company does not disclose all agreements of this type). BMI would also expect Facebook to invest more in its own data centre facilities in key Asian markets in the future, although it may be more cost-effective in the short to medium term to work with local providers including, perhaps, TdC to meet rising data volumes.