Asset manager Keppel and Vietnamese conglomerate Sovico Group are discussing plans for new undersea fibre-optic cables that would boost the region’s data centre industry, people familiar with the discussions said.
South-East Asian countries, a major junction for cables connecting Asia to Europe, are seeking to expand their networks to meet booming demand for artificial intelligence (AI) services and data centres. Vietnam plans to have 10 new submarine cables by 2030.Undersea cables are at the centre of the Sino-American tech war, with the two powers vying to win contracts, especially in Asia, to build and maintain the strategic infrastructure that carries most Internet data, including sensitive information.
Under one plan under discussion, a cable would be laid to link Vietnam directly with Singapore, five people directly involved or briefed on the matter said.
It would cost US$150mil (RM668mil), said one source with direct knowledge of the talks.
This option is favoured by Sovico. But talks with Keppel on the direct cable are in flux and no agreement has been reached yet, two sources with direct knowledge said.
They added that Keppel prefers a more ambitious cable plan involving a consortium of investors.
Under that second plan, the connection to Vietnam developed by Sovico would be an offshoot of a longer cable, three people said, with one noting it would run from Singapore to Japan with links to countries along the route.
The sources declined to be named because the information was not public.
Sovico, a conglomerate whose operations include aviation and banking, has recently announced plans on data centre development. It did not respond to requests for comment.
Keppel agreed last month to buy an AI-ready data centre facility in Japan. Singapore is a major hub for data centres and undersea cables, but the small island-state has nearly saturated its data usage capacity.
A spokesman for Keppel declined to answer Reuters questions about the two cable plans, saying: “We do not comment on market speculation.”
A Sovico executive mentioned the company’s cable plans with Keppel late last month in an internal meeting with Vietnam’s Prime Minister Pham Minh Chinh and other companies involved in the digital economy, one of the meeting participants said.
Vietnam’s government office and the foreign affairs ministry did not reply to requests for comment.
The two projects are separate from possible investments previously announced by Vietnamese companies in four new undersea cables, of which two would be built by Japan’s NEC, and one by China’s HMN Tech to connect Vietnam to existing international cables, according to public information.
The fourth was announced in April by Vietnam’s state-owned telecom firm Viettel and Singapore’s Singtel and would link Vietnam directly to Singapore under a preliminary plan.
No building contract has been announced. — Reuters
