KUALA LUMPUR: TFP Solutions Bhd (TSB) will participate in the nationwide 5G-enabled fibre-to-the-home (FTTH) roll-out via a special purpose vehicle (SPV) that has an estimated gross enterprise value of RM2.75 billion.
TSB, via its 75 per cent-owned subsidiary Jejak Semangat Sdn Bhd (JSSB), today signed a memorandum of understanding (MoU) with Landasan Salam Sdn Bhd (LSSB) for the project with the initial phase to commence in Langkawi.
LSSB is a special purpose vehicle (SPV) that will undertake the project for the nationwide FTTH project with connectivity backhaul provided by Allo Carrier Network Services (ACNS) operated by Allo Technology Sdn Bhd (ATSB), a subsidiary of Tenaga Nasional Bhd (TNB).
The initial phase of the FTTH project in Langkawi is valued at RM200 million, and it is expected to be completed in two to three years after project design and construction work have been completed.
Following completion, TSB and its partner will receive recurring revenue of approximately RM20 million per year for the next 20 years, bringing the total to RM400 million for operation, maintenance, and supervision of services provided during that time period.
TSB managing director Datuk Hussian @ Rizal A Rahman said the 5G-enable nationwide FTTH project would help to expand the potential of high-speed broadband internet access of up to 10 Gbps symmetrical connection speed and 5G deployments, especially for the rural areas.
"Our expertise in the information technology (IT) business, as well as our capacity to fund the operating cost for the project, gives us an edge over our competition," he said in a statement today.
He said the involvement in this project would open up the potential for recurring and sustainable earnings growth going forward for the company.
"On top of the RM200 million for the design and construction of the project, the first phase project in Langkawi will also help TSB to maintain a sustainable and recurring revenue," Hussian said.
A filing with Bursa Malaysia today shows that LSSB is working together for connectivity with ATSB to undertake the nationwide rollout of the project, with the initial phase in Langkawi to commence within six months from July 1, 2021.
The partnership entails the project's planning, financing, implementation, and operation over a 20-year extendable concession period.
JSSB will be acting as a project management company (PMC).
TSB will provide assistance and support for the project implementation and operating funds of not less than RM3 million.
With a strong balance sheet, access to various funding opportunities, and the know-how in the IT business, TSB is in a good position to provide the perfect synergy to LSSB.