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Malaysia’s rapid advancement in ICT

Interview - June 13, 2014
Dato Mohd Sharil Tarmizi, Chairman of the Malaysian Communications and Multimedia Commission, speaks about the evolution of the ICT sector in Malaysia, the National Broadband initiative and MCMC’s role as mediator between the government and the private sector.
Probably the most iconic symbol of globalization is the Internet. With complex networks, mobile phones, PCs, and social media this global system touches nearly all of us. Many economic experts define our era as “post-industrial” or the “information society” because socio-economic interactions revolve around information and communication. What is your perspective on this as far as Malaysia is concerned?

In order to understand where we are today in terms of ICT development, we need to look at the Vision 2020. Back in the 90s the government pointed out that knowledge should be one of the drivers of change in this country. For that to happen, we needed to put in place the right infrastructure in order to have a flourishing knowledge-based economy. Now we are seeing the results of the investment made by the country over twenty years ago. Despite the fact that we are a middle-income nation we do have a very high level of social media use. There are approximately 18 million people on Facebook and over four million on Twitter. These figures are very impressive considering that we have a population of only 28 million and so far we also have 68% of household broadband penetration. The government, through the Malaysian Communications and Multimedia Commission (MCMC), has put in place an ambitious plan to increase broadband penetration in order to bridge the digital divide. For instance, we have free wireless hotspots available across several parts of the country. In fact technology and telecommunication use has changed dramatically the way in which people communicate; nonetheless, it has positive and negative aspects. It has definitely had an impact on social behavior; it is evident when you consider how much time we spend in front of a smartphone screen. On the other hand, for instance, it is now easier for people to communicate with each other. Business is done in a more efficient manner thanks to ICT development. Telecommunications is spread throughout all sectors of our population. Previously mobile phones were considered a luxury item, now in households with low income you will find at least one mobile phone.

Telecommunications and ICT is one of the National Key Economic Areas (NKEA) identified under the Economic Transformation Programme. How is the sector contributing to Malaysia’s economic transformation?

Malaysia has advanced rapidly in terms of ICT infrastructure development and worked hard in order to achieve a knowledge-based economy. Now we are in the process of promoting content production. Since mid-2013 we have been promoting the development of applications for smartphones and social networks by local companies. There are already some success stories in this sense. For example, a company created by two 22-year-old Malaysians was acquired for $14 million by Facebook.
I remember that when we started with our development plan in 2007 people were skeptical about the success of the ICT sector. In seven years we have become a success story that is followed by other countries. Even though we are satisfied with the work done so far in terms of ICT development, we know that we need to keep working every day to improve our infrastructure, increase our penetration and the quality of our services.

MCMC is more than just a telecom regulator; we serve also as an industry development agency. For example, we conduct statistical surveys and we have programs to train people in broadband use.

MCMC supports the National Broadband Initiative. Now it’s no longer a matter of penetration but the focus has shifted to increasing the quality of connectivity. How is this effort proceeding?

Increasing the quality of connectivity is a never-ending job. The government believes that investing in ICT is investing in the people’s future. If we continue investing in the sector and creating a conducive business environment companies will join us by investing or reinvesting creating more and better jobs for our people. MCMC’s objective is to improve the life of the people in the country. We have to make sure that people in Malaysia have better connectivity in order to create an environment that enables innovation across all sectors of the economy. In the government’s Transformation Program, MCMC has been placed under the Content Creative Industries Cluster. However, we are involved across other clusters from transport, to health, education, finance and even agriculture. Our effort and the development of the ICT industries produce social “upliftment”, nobody is left behind in terms of connectivity. Technology is without a doubt a catalyst for change. The Prime Minister believes that connectivity is one of the engines that will move Malaysia from a medium to a high-income country by 2020. When it comes to broadband access and connectivity this government believes in the inclusion of the entire population. We are not only concerned about providing high-speed Internet to businesses in the main cities; we want to bring connectivity to rural and remote areas. I am sure that bringing connectivity to rural areas will dramatically improve people’s lives. Creating wealth for these people will also contribute to the general economic situation of the country.

What would you say is the role of PPPs in facilitating investments in the sector? What is the synergy between public and private sectors?

Malaysia is a pro-business country. However, MCMC faces the challenge of mediating between the interests of the government, investors and consumers. We need to find the right balance between these three parties in order to have equilibrium in the sector. Nevertheless, we see the private sector as a true partner for our initiatives. We promote our private partners to invest in remote areas in order to help us bring connectivity to those places. The government cannot take care of everything; it definitely has its role to play but needs the investment of private players. Last year the Alliance for Affordable Internet (an alliance done by the UK Development Agency and the USAID) conducted a survey amongst 46 emerging markets. Malaysia was recognized as the top performer in terms of having a conducive environment for investment in the ICT sector. I believe that we have found a sound balance in terms of returns and investment for our private partners in order to have affordable internet services.

BT recently opened its global shared service facility in Malaysia. Clive Selley said: We chose Multimedia Super Corridor Malaysia because of its globally competitive and multilingual workforce in addition to a world-class business environment and technology infrastructure. What are the main activities that MCMC undertakes in order to attract more FDI and British investors to place their regional HQ?

We are pleased to see that BT has chosen Malaysia as their hub for the region. MCMC has been actively on the road meeting potential investors, showing them the reality on the ground and the investment opportunities the country has to offer. I believe that Malaysia should do more in selling itself internationally. BT has visited many countries in the region and finally decided to pick Malaysia to set up their HQ. That is very satisfying for us.
Recently I had the honor of meeting Sir William Sargent, owner and CEO of Framestore. His company is the creator of the groundbreaking visual effects of the movie “Gravity”. Framestore has announced that they will work closely with Malaysian counterparts as they recognise the human capital talent that we have in our nation. That is one of the success cases of global interaction in creative industries.
We are open to show UK investors all the investment opportunities we offer in almost every sector of the economy. I do believe we enjoy a special relationship with the UK. Just consider all the educational institutions that have set up their campuses here. This shows not only the historical bond we have with the United Kingdom but also the long-term investment and business relationships across different sectors.

Many other interviewees share your same sentiment of “feeling at home” in London…

Maybe because I studied in the UK, or maybe because along with Bangladesh, India and Pakistan, we are one of the very few countries that plays cricket! Jokes apart, I believe there are strong opportunities for both parties and therefore I would like to invite British investors to come and explore our country even more.