KUALA LUMPUR: Kejuruteraan Asastera Bhd (KAB) is collaborating with Philippines-based conglomerate LCS Holdings Inc and ATS Venture Group Sdn Bhd to build and operate a telecommunication tower project in the Philippines.
In a statement, KAB said it had entered a memorandum of understanding with the two parties, wherein it will take a lead role in the financial arrangements of the project.
The contract for the project was secured by LCS, which will also be responsible for the provision of local site sourcing and acquisition, as well as communicating with the end-customers and relevant Philippines’ authorities.
Meanwhile, ATS will be the lead technology partner in the project, while both KAB and ATS will be the preferred supplier for procurements of related products for the project.
“KAB, LCS and ATS possess extensive experience in steel fabricating, supplying, constructing and erecting of steel telecommunication towers, which brings valuable advantages to the Project,” said KAB.
Upon completion of the project, the telecommunication towers will be leased to Dito Telecommunity Corp in the Philippines, which is co-owned by China state-owned China Telecommunications Corp, the parent of China Telecom.
The lease period will be for 15 years with an option to extend for another 10 years, allowing KAB to enhance its recurring income with the long-term concession over the next 25 years.
According to KAB, the new income stream is expected to contribute a revenue of RM15mil and a profit of about RM3mil per year.
Going forward, KAB has plans to invest and build 300 45-metre telecommunication towers in a long-term strategic partnership with LCS, said KAB managing director Datuk Lai Ken Onn.
“This MOU represents the latest milestone for KAB to venture into the telecommunication industry, in building and operating telecommunication towers as our new business segment.
“Setting forth with this new business segment will grow KAB’s stable recurring income continuously, in addition to our existing business,” he said.