The government intention to increase Internet coverage in rural areas, according to its Budget 2014 last Friday, is expected to generate a bigger economic impact on the overall development of new businesses and jobs in these areas.
Outsourcing Malaysia (OM) chairman David Wong Nan Fay said: “It is a timely move by the government as the way we communicate and do business will help to drive Malaysia’s efficiency and in general improve the services industry.”
“The move will eventually meets the government’s agenda towards a high income nation by 2020.
“The increase of Internet speed to 10 megabits per second (Mbps) is also a great move, as the impact will result in a better and faster delivery of content, which directly affects e-commerce, cloud and data centre service providers,” he said in an email response.
Last Friday, Prime Minister Datuk Seri Mohd Najib Razak announced a RM1.8 billion investment to implement the second phase of high-speed broadband (HSBB) project in collaboration with the private sector.
The initiative is expected to provide an additional coverage and facilities mainly in urban areas, benefitting 2.8 million households nationwide.
The collaboration with the private sector had involved an investment of RM11.3 billion since the 9th Malaysia Plan.
The HSBB project has been implemented with Internet access speed of 4Mbps and benefitting 2.3 million premises, particularly in urban areas.
Najib added that the HSBB network will be expanded to suburban areas with an Internet access speed increasing to between 4Mbps and 10Mbps, which will benefit two million consumers at a cost of RM1.6 billion.
On the other hand, Malaysian Internet Exchange (MyIX) chairman Chiew Kok Hin said the speed announced for the suburban and rural areas are sufficient especially where the exposure to the Internet is new and will take time to see increase in usage but the 10Mbps allocation is not enough for the urban area.
“The 10Mbps for the urban areas is rather low as the Internet consumption of our urban population is closer to a developed country, whereby the minimum offering of 50Mbps is common and 10Mbps is no longer sufficient to meet the demands of the urbanites,” he said.
Meanwhile, on the introduction of the Goods and Services Tax (GST) in 2015, Chiew, who is also AIMS Data Centre Sdn Bhd’s CEO, said the company is wary on its effects due to the cost of electricity consumption for the data centre industry.
Data centre industry falls under the Entry Point Project 3 of the Economic Transformation Programme.
“The average price for electricity in Malaysia for businesses is already higher than the global prices and this cost has already been a major burden for the data centre industry.
“Despite the boom of cloud services and social media across the globe, we have yet to see this translate to business for the data centre industry,” he said.
Chiew added that the high cost of electricity in a warm climate such as our country means higher cost to maintain data centres in Malaysia and will eventually become a deterrent for businesses to turn to Malaysia for their data centre needs.
“We hope the government will look into this in the near future as it is a growing concern for the industry,” Chiew added.