TM, Singtel in data centre tie-up

The JV company will first develop a sustainable, hyper-connected artificial intelligence-ready data centre campus in Johor.

KUALA LUMPUR: The two oldest telecommunication giants of Malaysia and Singapore, Telekom Malaysia Bhd (TM) and Singapore Telecommunications Ltd (Singtel), have joined hands to develop data centres with an initial funding of over RM1bil.

The 51:49 joint venture (JV) will be established between TM’s unit TM DC Educity Sdn Bhd and Nxera, the regional data centre arm of Singtel’s Digital InfraCo unit. TM will own the majority stake.

The JV company (JV-co), currently known as ST Dynamo DC Sdn Bhd, will soon change its name to TM Nxera Sdn Bhd, TM said in a filing with Bursa Malaysia.

It will first develop a sustainable, hyper-connected artificial intelligence (AI)-ready data centre campus in Johor that will be the largest to date for both TM and Nxera, the companies said in a joint statement yesterday.

The initial phase of the data centre is planned for 64 megawatts (MW) and can be scaled up to 200MW in response to market demand, it said.

The JV’s total committed equity funding amounts to approximately RM1.152bil, which will see TM injecting about RM588mil via TM DC Educity based on its initial 51% stake.

The companies said the total committed equity funding amount is subject to change, depending on the approved business plan of the JV-co at any point in time.

TM said it will fund its portion with internally generated funds.

“Establishing a hyper-connected AI-ready data centre marks the next phase in our long-standing partnership with Singtel, leveraging our strengths and commitment to elevate Asean as the preferred digital hub destination.

“TM brings the largest domestic network infrastructure, extensive international subsea cable systems and the largest interconnected DC in Malaysia, a solid backbone for this project,” TM group chief executive officer Amar Huzaimi Md Deris said.

“This will serve as a catalyst for high performance computing and lay a solid foundation for the future advancement of cloud and AI applications.

“This collaboration of two main telecommunication companies (telcos) in the region is unique and has a positive impact on the development of a digital ecosystem that not only benefit the businesses but also nurturing future talent,” he added.

The companies said the JV is a unique proposition, boosted by the extensive subsea cable networks of TM and Singtel’s Digital InfraCo which provide global connectivity and enhanced network performance with lower latency and improved reliability.

The strategic partnership aims to serve the needs of hyperscalers, next-generation AI application providers and enterprises pursuing accelerated digitalisation and cloud in the region, it said.

The announcement of this partnership also saw the JV-co entering into a conditional sales and purchase agreement with River Retreat Sdn Bhd to acquire a 16.9ha freehold land in Pulai, Johor.

River Retreat is a unit of Iskandar Coast Sdn Bhd, which in turn is an 80%-owned subsidiary of Iskandar Investment Bhd, it said.