Malaysia’s integrated telco and technology leader, TM, is partnering Nxera, the regional data centre arm of Singtel’s Digital InfraCo unit, in a joint venture (JV) to develop data centres in Malaysia, starting with a sustainable, hyper-connected AI-ready data centre campus in Johor.
This strategic partnership aims to serve the needs of hyperscalers, next-generation AI application providers and enterprises pursuing accelerated digitalisation and cloud in the region. The joint venture is bolstered 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.
Located in Iskandar Puteri, just 16km from Singapore, the data centre campus will be the largest to date for both TM and Nxera. It will be built to the latest standards for reliability, security and sustainability while offering the best local and international connectivity. With its close proximity to subsea cable links between Singapore and Malaysia, the data centre will be well-placed to support the increasing demand from both countries’ digitalisation and development initiatives.
On June 15, the joint venture company (JVCo) had proposed to acquire a plot of freehold land in Mukim Pulai, Johor. Measuring approximately 168,959 sq m, this land parcel will house the upcoming data centre facility. The purchase consideration for the land acquisition is approximately RM178.2 million ($51.2 million).
The initial phase of the data centre is planned for 64MW and can be scaled up to 200MW in response to market demand.
Nxera MY and TM DC Educity will hold stakes of 49% and 51% respectively in the JVCo, ST Dynamo DC, a newly incorporated Malaysian company.
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Nxera and TM have agreed to fund the JVCo via the subscription of new ordinary shares in the 49:51 proportion respectively, based on the agreed business plan of JVCo, which takes into account the necessary capital requirements.
Nxera and TM have agreed to commit up to RM1.15 billion as initial capital for the JVCo, with Nxera pro rata commitment being RM564 million, over a period of 5 years. Nxera will fund its subscriptions from internal cash resources.
Under this joint venture, TM will contribute its expertise in the region’s network infrastructure deployment to deliver customised range of wholesale data, connectivity, data centre and platform solutions catering to both local and international needs. TM also provides Cloud services via its sovereign Cloud Alpha Edge solution.
TM currently operates seven data centres across Malaysia with 2 core data centres located in Klang Valley and Johor.
Nxera is a rapidly growing regional platform backed by Singtel and leading global investment firm KKR, leveraging its data centre operations in Singapore to expand overseas. Customers can also tap into a host of services such as Singtel’s Paragon cloud orchestration platform and upcoming GPU-as-a-Service. They will be able to orchestrate their AI workloads in a multi-network and multi-cloud environment, serving as a catalyst for greater innovation, entrepreneurship and business excellence.
Nxera is developing three new AI-ready data centres in the region in addition to 62MW of existing capacity in Singapore. This includes a new 58MW data centre in Tuas, Singapore and data centres with partners in Indonesia and Thailand.
CEO of Nxera and Singtel’s Digital InfraCo unit Bill Chang says: “The development of this first data centre campus in Johor, which can be expanded in phases, demonstrates our ability to scale quickly in markets that are important to our customers. With our joint industry expertise and strong track record, we will build and operate one of the most efficient, sustainable and connectivity-rich data centres in Malaysia. In addition to data centres, we will be expanding the submarine cable connectivity between Singapore and Johor to enhance digital connectivity.”
He adds: “Our joint venture will also partner institutes of higher learning in Malaysia to nurture talent for our projects and the industry. Our strategy of developing data centre sites with close proximity to our operations in Singapore allow us to capture spill-over demand from our customers and help them scale their business with confidence.”
Amar Huzaimi Md Deris, TM’s Group CEO, says: “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.”
Md Deris adds: “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. 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 telcos in the region is unique and has positive impact to the development of digital ecosystem that not only benefit the businesses but also nurturing future talent.”
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Although Malaysia is just across the border, which assumingly makes it easier for Singapore companies to expand into the next door country, but that was not the case for Singtel. Previously, Singtel had made an offer for Malaysia's Time Engineering, a troubled telecoms and fibre-optics subsidiary of Renong Group.
However, the deal fell through due to geopolitical issues. Back then, prime minister Mahathir Mohamad kept a cautious stance on foreign companies with a strong government influence, especially if they wanted to wield influence in industries he sees as strategic.
Singtel was supposed to rescue Time from its mountain of debt back then. But due to the then prime minister's intervention, the deal fell through, with Malaysia's sovereign fund Khazanah instead bailing out Time.
Shares in Singtel closed at $2.58 on June 18.
