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DNeX strengthens market share in Indonesia’s fast-growing submarine cable industry; secures three-year contract with further three-year option for extension

Cyberjaya, 18 May 2021 – Dagang NeXchange Berhad (“DNeX”), through a consortium formed between business unit PT DNeX Telco Indonesia (“PT DTI”) and PT Samudera Mbiantu Sesami (“PT SMS”), has signed an agreement with PT Infrastruktur Telekomunikasi Indonesia (“TelkomInfra”) to supply installation and maintenance support services of submarine cable communications system via CS DNeX Pacific Link vessel.

Under the agreement, DNeX-led consortium will provide the services to TelkomInfra for a duration of three years with an option to extend for a further three years. TelkomInfra will pay a standby charge of Indonesian Rupiah IDR 213 billion (RM63 million) over the initial three-year period, excluding daily rates applicable depending on the work scope.

With an assumption of 65 per cent vessel utilisation rate in a year, estimated total revenue per year including standby charge is about IDR215 billion (RM62 million). Thus revenue for the initial three years of contract can reach up to RM186 million, and RM372 million with the additional three-year option.

The submarine cable communications system and maintenance support services will be supplied to TelkomInfra’s parent company, PT Telkom Indonesia Tbk, an Indonesian multinational telecommunications conglomerate, which is listed on the Indonesia Stock Exchange and has a secondary listing on the New York Stock Exchange.

“We are pleased to enter into this agreement, which marks a significant milestone for our submarine cable business and is expected to accelerate the segment’s growth and contribution to the Group’s revenue moving forward. The new contract can help propel the company to become a leading regional player in submarine cable laying, maintenance and repair works,” said Dato’ Sri Syed Zainal Abidin Syed Mohamed Tahir, Group Managing Director of DNeX.

“In the Asia Pacific region, Indonesia has one of the largest population of about 270 million people and one of the world’s fastest growing population of smartphone users, which can translate to growing demand for higher speed of data connectivity,” he said.

“Furthermore, international technology giants Facebook and Google have recently announced major investments into Indonesia, which include the construction of two new subsea cables connecting Indonesia and the United States of America. These major infrastructure developments present new and attractive market opportunity for our submarine cable business,” he added.

A consortium agreement was signed by PT DTI, PT SMS and TelkomInfra on 25 January 2021. Based on the terms of the agreement, the consortium is established for a period of three years and may be extended over the next three years.

Then on 18 March 2021, DNeX, through a consortium formed between business unit PT DNeX Telco Indonesia (“PT DTI”), PT Samudera Mbiantu Sesami (“PT SMS”), and PT Infrastruktur Telekomunikasi Indonesia (“TelkomInfra”), bagged a contract worth RM12.18 million for the main lay work of submarine cables in Indonesia.

DNeX currently provides end-to-end subsea and marine engineering services for all types of submarine cables through its submarine cable laying and repair asset CS DNeX Pacific Link. The vessel is equipped with state-of-the-art effective and stable dynamic positioning capability, classified as DP2, to ensure the accuracy of the vessel’s position.

With an accommodation capacity of 58 people, a service speed of nine knots and an endurance of 50 days, the vessel is rightly abled to carry out cable laying as well as repair and maintenance of submarine cables.