Analysis: Reach Ten a strong contender for Jendela Phase 2

KUCHING (April 2): Sarawak’s Reach Ten Holdings Bhd (Reach Ten) is emerging as a strong contender under the National Digital Network (Jendela) Phase 2 rollout, backed by its positioning in East Malaysia and track record in broadband deployment.

Analysts with RHB Investment Bank Bhd (RHB Research) in a note on Thursday maintained a neutral stance on the telecommunications sector but is positive on the rollout of the second phase of the Jendela programme.

It also identified Reach Ten as a notable beneficiary of the long-awaited Jendela Phase 2 implementation, alongside other tower infrastructure providers like edotCo, OCK Group, and Redtone International which were involved in the first phase of the programme.

“We see Reach Ten benefiting from site deployments in East Malaysia, being a Sarawak-based contractor with a track record of deploying broadband wireless access in Sarawak under Jendela Phase 1 and Starlink solutions for the Education Ministry,” it said.

The Jendala Phase 2, which entered the request-for-proposal (RFP) stage on March 31, is aimed at improving nationwide broadband and internet connectivity particularly in underserved and remote areas.

The rollout was initially set to commence in 2023 but execution issues and delays in Phase 1, notably in East Malaysia, delayed its implementation with an overhaul of the process.

Similar to Phase 1, registered bidders are only allowed to bid for a single part (Part 1 or 2) of either scope with a 12-month implementation period for traditional sites and six months for broadband wireless access (BWA) sites.

The government has allocated RM780 million under Budget 2026 for Phase 2 of the programme, which adopts fit-for-purpose technologies, including satellite-enabled BWA via a neutral host platform to enhance connectivity without relying solely on traditional tower infrastructure.

RHB Research expects letters of award to be issued between August and September 2026, following the June 3 submission deadline, with rollout to commence shortly after.

A second batch of RFPs is anticipated in the second half of the year.

RHB Research noted that 1,000 out of 2,700 sites have been allocated in the first batch, with East Malaysia accounting for the majority at 69 per cent.

Of the 2,700 sites, 64 per cent are BWA sites, while the remainder are traditional infrastructure such as towers and small cells.

While Reach Ten and other tier-two contractors stand to gain from stronger order books, larger telecommunications players are expected to benefit from improved coverage and connectivity nationwide.

Telekom Malaysia (TM) remains the sector’s top pick, supported by its role in fibre connectivity and 5G mobile backhaul fibreisation through wholesale agreements with Digital Nasional Berhad and U Mobile.

The JP2 initiative targets full internet penetration nationwide, building on existing progress that has already exceeded 9 million fibre premises passed as of end-January.