The extent and quality of telecommunications services are fast evolving in Malaysia. The coverage of 4G services in populated areas (COPA) has reached 97.3 per cent while that of 5G services has reached 73 per cent in populated areas as of October 2023. The stipulated target for the 5G coverage to be reached through Digital Nasional Bhd (DNB) set by the Malaysian government is a COPA of 80 per cent. In a recent interview at TowerXchange Meetup Asia 2023, Fahmi Fadzil, Minister of Communications and Digital, Malaysia, discussed how ideas like the satellite-to-device and satellite-as-towers have the potential to resolve the problems of connectivity while strengthening the three pillars of the digital ecosystem. Excerpts…

Malaysia has quite a stable economy and it is expected that the contribution of the digital economy to Malaysia’s GDP will reach 25.5 per cent by 2025”

Key pillars of the digital movement

Malaysia is the only country in the world that uses a single wholesale network approach. The government targets to formulate a second network after achieving the 80 per cent COPA for 5G. This would allow sustainable competition and reduce the probability of a single point of failure

It plans to achieve this through strategic initiatives by incorporating three key pillars of the digital ecosystem and positioning Malaysia as Asia’s digital tiger. As Malaysia strives to maintain its digital supremacy in Asia in the 1990s, it plans to establish the first pillar of digital growth, namely infrastructure. It aims at a swift, expeditious roll-out of 5G infrastructure and reach 80 per cent COPA. The main focus would be the adoption of 5G by not only retail consumers but also by industry, small and medium enterprises, and corporations in specific sectors like ports, heavy industry, manufacturing and logistics.

The second pillar is related to security, particularly cybersecurity and data protection. In the Association of Southeast Asian Nations (ASEAN), there is no “General Data Protection Regulation” (GDPR) equivalent. In fact, ASEAN countries have different policies on data sovereignty, portability and sharing. In Malaysia, it was planned that the Personal Data Protection Act would be amended in the first quarter of 2024. A bill will be introduced in Parliament to strengthen the act enacted in 2010. Malaysia was among the first movers to promulgate the Personal Data Protection Act in the region; however, it has fallen behind countries like Singapore in the last 13 years.

The third pillar and the most important one is the digital economy. The safety of the digital ecosystem is possible by enabling quality economic transactions. With this, the Malaysian government will be able to address not only the infrastructure issues in Malaysia but also reduce the possibility of cyber scams. This will, in turn, strengthen personal data protection not only in Malaysia but also in ASEAN.

Associated challenges

The growth of telecommunication and digital development is accompanied by a set of challenges. For instance, according to a GSMA Intelligence report, around $259 billion investment is required for connectivity infrastructure in the Asia-Pacific region by 2030. This amounts to a huge sum of investment for 5G connectivity in Malaysia as well. Besides, funds are a major challenge due to the coordination required between different levels of government like federal, state and local governments. Many local governments view the infrastructure sector as a major source of income, such as those through fees and permits. There are different vested interests in projects charging exorbitant fees for permits for laying the fibre infrastructure.

However, these organisational benefits should not stand in the way of creating greater and more meaningful connectivity for ordinary users. It must be understood that the digital economy could fundamentally be a great leveller in society and tele-connectivity would play a major role in reducing inequality in the world. Similarly, there are challenges pertaining to the funding of a single wholesale network approach. This needs to be taken upfront by the government and is targeted for 100 per cent 4G coverage of populated areas. A policy to ensure internet services wherever there is a road in Malaysia has also been announced to ensure connectivity in different parts of Malaysia.

Future expectations and aspirations

Malaysia has quite a stable economy and it is expected that the contribution of the digital economy to Malaysia’s GDP will reach 25.5 per cent by 2025. In order to ensure this, close collaborations with Asian counterparts are a must. It is believed that there should be some guidelines for data protection even if there is no ASEAN equivalent of GDPR or a full data protection regime. Malaysia has also become a centre for Global Business Services since the announcement of the Multimedia Super Corridor policy in the late 1990s. It is attracting many multinational corporations like Google, Amazon Web Services, Microsoft, ByteDance, etc., to set up their regional headquarters in Malaysia and hyperscale their AI data centres in the country. This will position Malaysia as not only a prime destination for data centres but also for a lot of companies to relocate their regional headquarters from more expensive neighbouring countries like Singapore.

Another area that the government is working on is creating a talent pipeline. It aims to streamline the permit process for foreign knowledge workers. Furthermore, Malaysia is increasingly becoming a data-hungry nation with oversubscription of mobile services. According to a report by Opensignal, data usage in Malaysia has more than doubled to the tune of nearly 50 gigabytes per month and 49 million mobile number accounts in 2023. This is a good indicator of oversubscription as the population of Malaysia is about 33 million. Hence, the country demands better fibre connectivity infrastructure and facilities. At an ASEAN regional level, there is a need to reduce bureaucracy.

Some of Malaysia’s counterparts like Lao, Cambodia and Vietnam face challenges in terms of lack of infrastructure while other areas like IndoChina face issues of stronger regulations. Malaysia, particularly, has a geographical potential for connectivity as a peninsula and as a part of the huge island of Borneo with a lot of small islands, some hilly areas and hyper-remote areas. It can serve as almost a perfect case study for the rest of ASEAN if it resolves its digital infrastructure problems.