KKR-backed OMS to unleash $300M subsea war chest

　　Malaysian cable construction firm OMS has set aside $300 million to tip into new cable systems and expand its core business.

　　The privately held company said the massive growth in demand for data centers and cloud and the high utilization rates of existing cables had "created an urgent need to expand our infrastructure."

　　In a statement it said it would collaborate with telcos and apply its "long-term investment capital to help them transition capital expenditures into sustainable operating expenses."

　　"The investment includes acquiring direct ownership of submarine cable systems and developing backhaul infrastructure from cable landing stations (CLS) to data centers," it said.

　　OMS did not provide specifics on the source of the funds and did not respond to queries from Light Reading.

　　But in the past 11 months it has announced two major transactions – a $400 million investment from private equity powerhouse KKR last October, and a $293 million debt-raising to expand its fleet and develop its subsea expertise announced in June.

　　OMS CEO Ronnie Lim said the company aims to be a one-stop shop for subsea cables, cable landing stations and terrestrial networks, with a focus on the ASEAN region.

　　Direct cable ownership

　　The integrated approach would lay the groundwork for expansion into the broader APAC market, he said.

　　Rozaimy Rahman, head of OMS interconnect managed services, said OMS's "expansion into direct asset ownership of submarine cable systems and CLS reflects our mission to enhance global connectivity, especially across Asia."

　　OMS's cable systems subsidiary, LitUp Networks, has just signed an MoU with Thai provider IGC to work on subsea cables and landing stations.

　　OMS did not specify what kind of cable investments it was targeting, although its website states that it owns dark fiber assets in southeast Asia.

　　But it's not clear how far its push into infrastructure ownership would take it onto the turf of its telco customers and partners.

　　Those with long memories of the subsea business might recall the scandalous case of Tyco International. CEO Dennis Kozlowski's extravagance and fraud landed him in jail and made the company a byword for corporate excess.

　　But one of its many mistakes was to enter the subsea cable business head-to-head against its telco clients. It spent $3 billion building out the 60,000-kilometer Tyco Global Network (TGN), ultimately selling it off to Tata Communications for $130 million.

　　With the AI boom driving growth and KKR at its side, OMS has the wind at its back. But it has a fine line to tread.