- Singtel and KKR together invest $1.3 billion to take a minority stake in ST Telemedia Global Data Centers
- Nxera, Singtel’s digital infra arm, and Telekom Malaysia will develop data centers in Malaysia
- The KKR-Singtel consortium will acquire a 18.3% stake in STT GDC
Earlier this week, Singaporean service provider, Singtel announced two significant data center deals to consolidate and grow its profile in the booming data center market in the region.
Singtel, along with KKR, a global investment firm, will invest $1.3 billion to acquire a minority stake in ST Telemedia Global Data Centers (STT GDC), a prominent digital infrastructure company.
The KKR-Singtel consortium will acquire a 18.3% stake in STT GDC. The funds from this transaction will be used to support the latter’s international expansion and growth. Singtel claims that the transaction is the largest digital infrastructure investment in Southeast Asia in 2024.
STT GDC has over 95 data centers across 11 geographies and points of presence in over 20 major business markets. Its data center portfolio has a combined capacity of more than 1.7GW of IT load.
“This is a solid opportunity for Singtel to gain exposure to an established platform with a footprint in high-quality data centre markets and aligns with our Singtel28 strategy to further scale our digital infrastructure business in collaboration with like-minded partners,” says Arthur Lang, Group Chief Financial Officer of Singtel in a press release. Singtel launched a new growth strategy, Singtel28, last month, focusing on three core areas of connectivity, digital services, and digital infrastructure.
“With the industry experiencing unprecedented cloud and AI-led growth, this strategic partnership with KKR and Singtel will be a significant catalyst for STT GDC's next chapter of growth as a leader in the digital infrastructure industry,” says Bruno Lopez, President and Group CEO, STT GDC.
“Our investment in STT GDC is a rare opportunity to support the growth of a leading data centre platform with a terrific track record of growth and significant potential, whilst deepening our existing collaboration with Singtel,” says David Luboff, co-head of KKR Asia Pacific and head of Asia Pacific infrastructure, KKR. Singtel’s digital infra arm, Nxera, is backed by KKR.
Singtel’s Nxera and Telekom Malaysia to joint develop data centers in Malaysia
In the second announcement, Nxera also formed a joint venture with Malaysia’s largest service provider, Telekom Malaysia (TM), to develop next-generation data centers in Malaysia. The two companies will start by developing a data center campus in Johor. While the initial planned facility is for 64MW, it will be expanded to 200MW in line with the growing demand.
“This strategic partnership aims to serve the needs of hyperscalers next-generation AI application providers and enterprises pursuing accelerated digitalization and cloud in the region,” says the press release. The joint venture leverages Telekom Malaysia’s submarine cable networks and Nxera’sexpertise in building digital infrastructure to provide connectivity solutions to hyperscalers and global businesses.
With AI adoption growing, Nxera is looking to expand its operational data center capacity from the existing 62MW to more than 155MW. In addition to a joint venture with TM, it is developing three next-generation AI-ready data centers in Singapore, Indonesia and Thailand.
"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,” says Amar Huzaimi Md Deris, TM’s group CEO. TM operates seven data centers in Malaysia with two core data centers in Klang Valley and Johor.
Nxera and TM will also be expanding the subsea cable connectivity between Singapore and Johor to improve connectivity. “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 allows us to capture spill-over demand from our customers and help them scale their business with confidence,” says Bill Chang, CEO of Nxera and Singtel's Digital InfraCo unit. Singtel is also planning to launch GPU-as-a-Service in the third quarter of the year, which would be available to Nxera’s customers as well.
With the growing digital transformation of the enterprises in the region coupled with the adoption of Artificial Intelligence (AI), there is a boom in the data center segment in the region. There is a burst in investment in the Southeast Asia region from cloud service providers, hyperscalers and service providers to cash in on the growing demand.