Sacofa plans to invest RM80mil in ‘fibre-lisation’ programme

KUCHING: Sacofa Sdn Bhd, which owns some 550 telecommunication towers in Sarawak, will connect these towers to its extensive on-land fibre network and Kuching-Mersing optical fibre submarine cable system.

Managing director/CEO Abang Jemat Abang Bujang said Sacofa would invest an estimated RM80mil in the “fibre-lisation” programme of at least 400 telecommunication towers by next year.

“The connection of these towers to the optic fibre network will provide very high capacity of bandwidth capable for use of 4G and long-term evolution (LTE) networks.

“With this, we are becoming Internet Protocol-based. Our intention is to prepare for state-of-the-art technology,” he told StarBiz yesterday.

Abang Jemat said Sarawak was the first state to implement the fibre network programme, which was now undertaken by local contractors.

Sacofa owns some 2,000km on-land fibre network which is being upgraded and 1,000km submarine optic fibre system with acapacity of 40GBs but could be raised up to 400GBs.

The submarine cable system is also linked to Sabah and Brunei.

He said since 2003, Sacofa had invested more than RM500mil in the construction of telecommunication towers state wide to cater for the network expansion needs of cellular operators and other organisations.

Sacofa, which is 69.6%-owned by the Sarawak government through state financial secretary, was set up by the state authorities to develop telecommunication infrastructure to be commonly shared by all telecommunication firms (telcos) and service providers.

Sarawak is the first state to enforce sharing of telecommunication infrastructure.

Before that, telecommunication towers in Sarawak were owned by the respective telcos.

Sacofa has more than 15 clients, including Telekom Malaysia (TM), Maxis, Celcom, Digi, Redtone, Sapura, Celcom Timur, Time, Jaring, Danawa Resources, Radio Television Malaysia and the police force.

Sacofa's other shareholders are Celcom Bhd (15.12%), Sarawak Information Systems Sdn Bhd (Sains) (7.56%), Yayasan Sarawak (6.8%) and PASB Technology Sdn Bhd (0.91%).

Abang Jemat said Sacofa had acquired all the 103 telecommunication towers from TM for some RM22mil.

“Sacofa will acquire another 107 telecommunication towers from Digi, Maxis and Celcom very soon.

“The acquisition will be completed by this year,” he added.

He declined to indicate how much Sacofa would pay for these towers.

The additional 107 towers will bring Sacofa-owned towers to nearly 660.

Sacofa towers are leased to the various telcos for seven years under standard rates.However, the rates will be reduced on the renewal of the agreements as Sacofa expects to recoup its investment in these towers in about seven years.

Abang Jemat said about 99% of Sacofa towers were utilised with at least 80% of them shared by multi-users, up to eight users per tower.

“We have provided coverage to almost all the areas in Time I zone (towns) and 80% of the areas in Time II Zone (sub-urban).

“Every year, Sacofa builds an average of 60 telecommunication towers. Our annual capital expenditure is between RM30mil and RM40mil,” he added.

He said Sacofa had projected its 2011 revenue to reach RM160mil which doubled the RM80mil recorded in 2007. The company is targetting an annual revenue growth rate of 15%.

Sacofa posted a pre-tax profit of RM44mil on a turnover of RM123.7mil for the financial year ended Dec 31,2010 up from RM35.8mil and RM106.7mil respectively in 2009 .

Abang Jemat said with good cash flow, Sacofa was in a “comfortable position” to settle its sukuk bonds amounting to RM400mil in 2016.

The bonds were issued mainly to fund the construction and acquisition of the telecommunication towers.

On Sacofa's plan to go for a listing on Bursa Malaysia to tap the capital market to finance its development of telecommunication infrastructure, he said :”We are still exploring the proposal. No decision has been made yet.”