KUALA LUMPUR: Sarawak-based telecommunications service provider Reach Ten Holdings Bhd is set to expand its fibre optic duct infrastructure in the state to Miri, Sibu and Bintulu over the next three years, tripling its fibre footprint to 767km from 217km currently.

Managing director Leo Chin said the company took about 14 to 15 years to build the first 217km of fibre optic duct in Kuching and Samarahan.

“With the IPO proceeds, we will be able to expand beyond Kuching to Sibu, Miri and Bintulu within three years for another 550km of duct infrastructure.

“That is the scale we are referring to. Instead of spending another 14 or 15 years, this time we just need three; we can triple the distance we have,“ Chin said at a press conference following the company’s listing ceremony today.

He said new towers will be located in urbanised areas like Miri, Sibu and Bintulu, which are key commercial and manufacturing hubs, to meet the growing demand for high-speed connectivity.

“These efforts will cater to the immediate connectivity needs and lay the foundation for Sarawak’s smart city initiatives, including intelligent traffic systems and digital services,“ he added.

Chin said Reach Ten’s market share in Sarawak’s fibre and tower segments is below 1%, but it sees strong growth potential.

“We believe that in three to five years, the fibre business will pick up strongly because we are spending RM60 million over the next three years to expand outside Kuching. So, naturally, we expect to generate significant revenue from that segment,“ he said.

Currently, 90% of Reach Ten’s revenue comes from its satellite segment, which it expects to remain its core business.

“We have to accept the fact that we are operating in Sarawak, with the big landmass and also the challenging terrain; satellite services are still the preferred choice when you talk about providing services to the underserved communities.”

Founded in 2005, Reach Ten provides connectivity solutions in Sarawak for businesses, government bodies and the telecommunications industry, with a focus on infrastructure expansion and technological innovation.

Reach Ten has been involved in major government-led digital initiatives, including Jendela, Smart and Saluran, ensuring secure, high-speed connectivity throughout the state.

“As Sarawak continues its journey towards becoming a digital economy leader, Reach Ten remains committed to providing the infrastructure and technology necessary for the state’s transformation,“ Chin said.

Reach Ten shares opened at 52 sen each, the same as its IPO price. It closed at 54 sen, 3.85% above the IPO price.

The company raised RM104 million from its public issue of 200 million new shares. The listing also includes an offer for sale of 100 million existing shares to selected investors by way of private placement.

Of the total proceeds, RM60 million (57.7%) is allocated to expand its existing fibre optic communication networks infrastructure in Kuching and to establish three new fibre optic communication networks infrastructures in Miri, Sibu, and Bintulu.

A further RM25. million (24%) will be used for the construction of the additional 100 4G and 5G telecommunication towers across Sarawak – particularly in Miri, Sibu and Bintulu – to support the state government’s initiatives to widen internet coverage and connectivity, especially the 4G and 5G coverage in rural areas.

Part of the proceeds amounting to RM4.3 million (4.1%) will be used to enhance its satellite-based communication networks and service capability by acquiring additional mobile and fixed satellite terminals, hardware, and software, as well as enhancing its facilities in the teleport.

The remainder ill be used for working capital requirements amounting to RM5 million (4.8%); RM1.7 million (1.6%) to repay bank borrowings; and the remaining RM8 million (7.7%) to defray the estimated listing expenses.

Based on the enlarged share capital of one billion shares, Reach Ten is expected to have a market capitalisation of RM520 million after listing.

M&A Securities Sdn Bhd is the principal adviser, underwriter and placement agent for the IPO exercise.