KUALA LUMPUR: Kejuruteraan Asastera Bhd (KAB) has entered into a tripartite Memorandum of Understanding (MoU) with two parties to build and operate a telecommunication tower project in the Philippines.
The two parties are ATS Venture Group Sdn Bhd and the Philippines-based conglomerate LCS Holdings Inc.
Managing director Datuk Lai Keng Onn said the MoU represented the latest milestone for KAB to venture into the telecommunication industry, in building and operating telecommunication towers as its new business segment.
"Setting forth with this new business segment will grow KAB's stable recurring income continuously, in addition to our existing business.
"This partnership is indeed an exceptional opportunity for KAB to continue expanding its footprint in the Southeast Asia region," Lai said in a statement today.
KAB said the new income stream was expected to provide a revenue of RM15 million with a profit of about RM3 million per year.
KAB intends to invest and build 300 telecommunication towers with each tower being 45 metres tall.
"I look forward to jointly build on this new long-term strategic partnership with LCS to support Philippines' telecommunication industry, which has grown tremendously over the years, with the continuing appetite of many Filipinos in communicating through their mobile phones, accessing information through the internet, streaming and downloading videos," he said.
Under the MoU, KAB will take a lead role in the financial arrangements, while ATS will be the lead technology partner to support the project.
LCS' responsibilities include the provision of local site sourcing and acquisition, as well as communicating with the end-customers and relevant Philippines' authorities.
The telecommunication towers will be leased to Dito Telecommunity Corporation there, which is co-owned by China state-owned China Telecommunications Corporation, the parent company of China Telecom, for 15 years.