Converge to spend $100M for connection to Bifrost Cable System

Converge ICT Solutions Inc. will invest over $100 million for a project to develop a branch on the Bifrost Cable System that will land in Davao.

The local provider on Wednesday said it has inked a term sheet with Keppel Midgard Holdings Pte. Ltd. (KMH) to grant Converge an indefeasible right of use (IRU) for one fiber pair on the main truck of the Bifrost Cable System which links Singapore to the west coast of North America.

The additional branch is expected to significantly increase Converge's internet speeds and network diversity for businesses and consumers in the Philippines.

The Bifrost Cable System is the world's first subsea cable system spanning over 15,000 kilometers. It is expected to be completed in 2024 and will become the largest capacity high-speed transmission cable across the Pacific Ocean.

According to Converge CEO Dennis Anthony Uy, the connection will allow the company to activate at will up to 15 Terabits per second of capacity.

"This is an important milestone not just for Converge but also for the Philippines as we expect to experience faster internet speeds and greater resiliency within our fast-growing fiber network with the completion of this project," he said in a regulatory filing.

"We look forward to a continued strong collaboration with Keppel to bring our countries closer together and further enhance the connection of the region to the rest of the world," added Uy.

Converge noted, however, that the completion of the proposed transaction is still subject to negotiation and execution of definitive agreements and relevant regulatory approvals.

The company in October said it is set to spend P29 billion in the next 18 months to finance its expansion across the country, the same amount it made from its initial public offering.

Shares in Converge on Wednesday went up P0.10 or 0.53% at P19.10 apiece from Tuesday's finish of P19.00.

Meanwhile, KMH is a subsidiary of Keppel Telecommunications & Transportation, a service provider in the Asia-Pacific region and Europe with businesses in logistics, data centers, and subsea cable systems.

"We are pleased to partner Converge through Bifrost, which is a significant transnational infrastructure project, enhancing the interconnectivity between ASEAN countries," said Keppel CEO Thomas Pang. -MDM, GMA News