KT Corporation (formerly Korea Telecom), South Korea’s largest telecommunications company, and Savills Korea, as an asset manager, today announced that they have signed a memorandum of understanding (MoU) to jointly develop a new 5.6k-mile (9.0k-kilometer) subsea cable in the Asia-Pacific region.
Subsea Cable in Asia-Pacific – KT and Savills Korea
Geographically, KT and Savills Korea’s new subsea cable will connect 6 countries across Asia-Pacific, including South Korea, Japan, Taiwan, Indonesia, the Philippines, and Singapore.
As part of the MoU, KT will oversee the design and construction of the subsea cable, as well as its operation after completion. Additionally, KT will fund a portion of the subsea cable’s build costs as a “strategic investor”. Historically, KT’s ownership interest in its prior subsea cable builds (see below) has been less than 20%.
At the same time, Savills Korea will be responsible for asset management, which will include formulating & implementing a business plan, attracting investors, contracting, and licensing.
Customers / Partners
KT and Savills Korea intend to attract global cloud service providers, telecommunications operators, and over-the-top (OTT) media service providers to be customers and/or consortium partners on their subsea cable. Indeed, because of the high cost of laying a subsea cable, the common practice is for multiple carriers to jointly commission a new cable and share the costs and the capacity.
Previously, KT has partnered on its subsea cable builds with telecom operators China Mobile, China Telecom, China Unicom, Chunghwa Telecom, PLDT, SoftBank, and Starhub, amongst others. Additionally, hyperscale companies Facebook and Microsoft have also teamed up with KT in the past.
In terms of institutional investors, Crystal Soojeong Lee, CEO of Savills Korea, lists firms such as the Abu Dhabi Investment Authority (ADIA), Blackstone, Government Employees Pension Service (GEPS), Invesco, KKR, Korean Teachers’ Credit Union (KTCU), M&G, National Pension Service (NPS), Orion, and PGIM, as her group’s key clients.
KT Corporation – Subsea Cables
KT Corporation has a significant portfolio of subsea cable infrastructure in South Korea including two cable landing stations in Busan and Keoje. Additionally, the company owns interests in several international subsea cable networks, including:
- Asia-Pacific Gateway (APG): 8.5% interest in the 6.8k-mile (11.0k-kilometer) subsea cable, which connects South Korea, China, Japan, Thailand, Taiwan, Hong Kong, Vietnam, Singapore, and Malaysia
- New Cross Pacific (NCP): 16.7% interest in the 8.7k-mile (14.0k-kilometer) subsea cable, which connects South Korea, China, Japan, Taiwan, and the United States (Hillsboro, Oregon)
Savills Korea – Overview
Savills Korea is the South Korean division of Savills, which provides consulting services in commercial real estate and digital infrastructure, including data centers. Notably, Savills Korea was involved in Equinix’s recently announced $525m, 45-megawatt joint venture agreement with GIC to extend its xScale program into Seoul, South Korea.