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Singtel outlines ambitions to become an ASEAN data centre power player

Strategy shift to double down on Asia's continued digital economy boom nets a cool $1.38B from AustralianSuper

Singapore-based telecoms provider Singtel is selling a huge chunk of its Australia Tower Network (ATN) to fund its 5G rollout, and beef up its data centre holdings.

70 percent of ATN's 2,312 mobile network towers and rooftop sites will change hands for AU$1.9 billion (US$1.38B), A$500 million (US$363M) of which is earmarked as a return of capital by ATN to Singtel and the same amount again will be used to repay ATN's loans to Optus – Singtel's Australian telco subsidiary.

Singtel will spend the remainder on a 5G rollout and expanding technology services arm NCS across Australia and Singapore.

Ditching its Australian telco towers will also see Singtel have a crack at becoming a regional data centre player.

For starters, Singtel and Thai power and infrastructure company Gulf Energy onboard will build and develop structures in Thailand, plus with Indonesian partner Telkom exploring expansion into Indonesia and other parts of Southeast Asia.

According to Gulf Energy [PDF], the MOU establishing datacentres across Thailand intends a 50 per cent equity stake between the power company and the telecom conglomerate.

The number of datacentres for each partnership to develop remains undisclosed, and possibly undecided. Gulf Energy CEO Sarath Ratanavadi signaled that the datacentre development would be ongoing, eventually nonsingular, and geographically diverse.

"We look forward to leveraging our local expertise in combination with Singtel's strengths to build a strong datacentre business in Thailand," said Ratanavadi, adding "We believe that this collaboration signifies the beginning of a long-term partnership that will allow us to pursue more datacentre businesses in Asia in the future."

"From our telecom towers to our datacentres, it is imperative that we restructure our assets and re-organise our business to better fund, improve and grow our digital infrastructure,: said Singtel CEO Yuen Kuan Moon in a canned statement.

Yuen cited Asia's digital growth – a trend predicted to land the region as the largest datacentre market globally with a CAGR of 18 per cent from 2020 to 2025 - as the reason for the shift in strategy. Singtel cited Frost & Sullivan 2020 Data Centre Services Market Forecast to back its belief that demand for data centres comes from hyperscale cloud-based service providers needing closer proximity to end users.

Singtel's current datacentre assets have a combined capacity over 70 MW and rake in S$250 million a year. The company's growth prospects appear decent, as global data centre players have limited presence in South-East Asia. ®

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