Supply Contract Submarine Cable



Generally, most of Supply Contract  (SC) in submarine cable industry are divided in the following parts;

Part 1 Terms and Conditions of Contract

Part 2 Price Schedule

Part 3 Technical Specifications

Part 4 Plan of Work

Part 5 Billing Schedule

Part 6 Contractors Documents

Part 7 Responsibility Matrix

Part 8 Permit Matrix

Once Supply Contract is signed; any changes in the Contract will be executed by CV – Contract Variations. It can be either positive CV, negative CV or zero CV.

For consortium type of submarine cable; prior signing of SC with Contractor; the Construction & Maintenance Agreement (C&MA) is signed by cable owner (project sponsor).

[Submarine Cable] Excess Capacity in 2016 ?


From my analysis on submarinecable map 2015 ; year 2016 will have excess capacity because about 7 cable system will RFS in that year.

imageThe capacity will enough for 10 years demand forecast by most of carriers. If you look back in year 2004-2005; the same pattern happend in the submarine cable industry. In average 10 years booming pattern.

What are strategy that carrier can adopt to ensure the capacity are utilised, generating more revenues or expedite ROI or pay back period on investment ?

I think the following approach or strategy can be adopted by carriers:

1. Pre RFS Sales ; meaning that sell the capacity in 2015 instead of wait till it is RFS in 2016.

2. Capacity swap between carriers in different cable systems with different routes.

3. Start Early Marketing –  start to contact your potential customer early ; get their forecast; co location / space required and destinations.

4. OCU – Occasional Common Use – for middle east countries may prepare for World Cup. I think that is one of reason why Ooredoo are investing in both SMW5 and AAE-1.

5.I will add more after after this  .


Insurance fees to go up by 6%

[The Star 8 March 2015] By Christina Chin

Travel insurance new

PETALING JAYA: Staying healthy will cost even more as medical insurance fees, charges and premiums, go up next month.

Although life insurance is exempted from the Goods and Services Tax (GST), policyholders must pay at least 6% more for medical and health-related insurance coverage.

The National Association of Malaysian Life Insurance Fieldforce and Advisers has appealed to the Government to exempt “necessity policies” covering hospitalisation and critical illnesses from the GST.

Otherwise, many may surrender their policies or lapse in their premium payments, said its president Victor Kho Chui Ing.

“GST will be an additional cost for individual policies that are coming up for renewal.

“If a family of five with a medical policy pay a total of RM7,500 per annum, the additional cost to them would amount to RM450 yearly.”

He said many prospective clients and those planning on topping up their existing policies had adopted a “wait-and-see” attitude.

“They want to gauge the GST impact on their finances first because the new tax applies not only to insurance but to most of their daily expenses,” Kho said.

He warned that it was crucial for policyholders to understand that GST would impact all traditional and investment-linked policies which had medical, critical illness or personal accident benefits attached.

For traditional policies, the GST is imposed on the premium. For investment-linked policies, it is charged on the insurance charges.

For investment-linked policies, insurance charges escalated with age because of higher insurance charges, he said.

“For example, at age 35, insurance charges for the medical benefit alone is about RM422. At age 65, it rises to almost RM2,500 – exceeding the RM1,176 annual premium paid for the medical coverage alone,” he said, adding that some policyholders above age 60 might pay up to RM5,000 in annual insurance charges.

“With a 6% GST imposed on insurance charges, many senior citizens may potentially lose their coverage or need to top up premiums to sustain their coverage.”

Kho urged policy holders to check their policy statements regularly.

“For investment-linked policies, the annual premium may not increase as the GST and insurance charges are deducted from the policy’s cash value, thus eroding the accumulated cash value meant for retirement, children’s education and sustaining future premiums.

“You need to keep tabs on the cash value or you may wake up at age 60 without a retirement fund.”

He said the majority of more than two million life insurance policy holders nationwide had investment-linked and traditional policies with attached medical coverage.

Life Insurance Association of Malaysia (LIAM), in a statement, said fees and charges imposed on investment-linked policies and critical illness, medical and health and personal accident premiums were subject to GST.

LIAM advised all policyholders to contact their insurance companies to find out the amount payable from April 1.

General Insurance Association of Malaysia (PIAM) chairman Chua Seck Guan said policyholders were required to pay the additional 6% as all general insurance policies were subject to GST “unless the risks are located outside Malaysia”.

“However, general insurance premiums will remain the same,” he said.

A Prudential Assurance Malaysia Berhad spokesman said there was no GST for life insurance products like endowment, child, education and annuity.