Unique-Singapore, Vietnam corporations in talks for brand new undersea cables, sources say

By Francesco Guarascio and Phuong Nguyen

HANOI (Reuters) – Singaporean asset supervisor Keppel (OTC:KPELY) and Vietnamese conglomerate Sovico Group are discussing plans for brand new undersea fiber-optic cables that might increase the area’s knowledge centre trade, individuals aware of the discussions stated.

Southeast Asian international locations, a significant junction for cables connecting Asia to Europe, are looking for to increase their networks to satisfy booming demand for AI providers and knowledge centres. Vietnam alone plans to have 10 new submarine cables by 2030.

Undersea cables are on the centre of the Sino-American tech battle, with the 2 powers vying to win contracts, particularly in Asia, to construct and keep the strategic infrastructure that carries most web knowledge, together with delicate data.

Beneath one plan underneath dialogue, a cable can be laid to hyperlink Vietnam straight with Singapore, 5 individuals straight concerned or briefed on the matter stated.

It will value $150 million, in line with one supply with direct information of the talks.

This selection is favoured by Sovico, however talks with Keppel on the direct cable are in flux and no settlement has been reached but, two sources with direct information stated.

They added that Keppel prefers a extra bold cable plan involving a consortium of traders.

Beneath that second plan, the connection to Vietnam developed by Sovico can be an offshoot of an extended cable, three individuals stated, with one noting it might run from Singapore to Japan with hyperlinks to international locations alongside the route.

The sources declined to be named as a result of the knowledge was not public.

Sovico, a conglomerate whose operations embody aviation and banking, has lately introduced plans on knowledge centre growth. It didn’t reply to requests for remark.

Keppel agreed in November to purchase an AI-ready knowledge centre facility in Japan. Singapore is a significant hub for knowledge centres and undersea cables, however the small island-state has almost saturated its knowledge utilization capability.

A spokesperson for Keppel declined to reply Reuters questions in regards to the two cable plans, saying: “We don’t touch upon market hypothesis.”

A Sovico government talked about the corporate’s cable plans with Keppel late final month in an inner assembly with Vietnam’s Prime Minister Pham Minh Chinh and different corporations concerned within the digital financial system, one of many assembly contributors informed Reuters.

Vietnam’s authorities workplace and the overseas affairs ministry didn’t reply to requests for remark.

US-CHINA COMPETITION

Beneath the preliminary plans, no resolution had been made about who would construct both of the cables, however two individuals aware of the talks stated Chinese language contractors wouldn’t be concerned within the doable direct hyperlink between Vietnam and Singapore.

Sovico was briefed by U.S. officers about alleged dangers linked to picking Chinese language contractors for the cables, two individuals with direct information of the talks informed Reuters.

U.S. officers and consultants have organised a number of briefings with Vietnamese and Singaporean officers in current months to discourage them from utilizing HMN Applied sciences, a part of a worldwide marketing campaign to include the rise of the Chinese language contractor, Reuters completely reported in September.

The 2 tasks are separate from doable investments beforehand introduced by Vietnamese corporations in 4 new undersea cables, of which two can be constructed by Japan’s NEC, and one by China’s HMN Tech to attach Vietnam to current worldwide cables, in line with public data.

The fourth was introduced in April by Vietnam’s state-owned telecom agency Viettel and Singapore’s Singtel and would hyperlink Vietnam on to Singapore underneath a preliminary plan. No constructing contract has been introduced.

Vietnam, with a inhabitants of almost 100 million, is a big marketplace for on-line platforms, however is presently related to the worldwide web infrastructure by way of solely 5 undersea branches to worldwide cables.

Its plans to triple the variety of its cables are seen by trade specialists as a doable increase to its probabilities of turning into another regional knowledge centre hub, regardless of energy provide points and strict knowledge laws.