Home Asia-Pacific IV 2001 Malaysia’s Approach to Communications, Multimedia, Information and Content Services – Aspirations of a Hub

Malaysia’s Approach to Communications, Multimedia, Information and Content Services – Aspirations of a Hub

by david.nunes
Tan Sri Nuraizah Abdul Hamid Issue: Asia-Pacific IV 2001
Article no.: 3
Topic: Malaysia’s Approach to Communications, Multimedia, Information and Content Services – Aspirations of a Hub
Author: Tan Sri Nuraizah Abdul Hamid
Title: Chairman
Organisation: Malaysian Communications and Multimedia Commission
PDF size: 24KB

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Article abstract

This article presents an overview of the economic and regulatory perspectives on the regional issues of the digital revolution and technological convergence. The author, Tan Sri Nuraizah Abdul Hamid is Chairman of the Malaysian Communications and Multimedia Commission. In her eminent career Tan Sri has worked in various economic Ministries and she brings this experience to bear in a comprehensive analysis of the industrial and technological issues facing Malaysia, ASEAN nations and Asia-Pacific as a whole.

Full Article

Communications versus Telecommunications ‘Telecommunications’ now goes beyond voice. It extends not only to data services but also to service solutions. In the advent of a convergence environment, ‘communicating’ is in the forefront. Technology is no longer a service, it is an enabler to ‘communications’. In this sense therefore, we view the ‘telecommunications’ industry as more of a ‘communications’ industry. Asia-Pacific as a New Growth Centre – Malaysia in Perspective Communication today is borderless. However, it is useful to note the diversity of growth and the digital divide amongst the Asia-Pacific countries. Countries such as Japan, South Korea, Hong Kong, Singapore have high penetration rates with the Asian tigers showing strong growth rates as well in the last five years. Taiwan shows fastest growth and highest penetration rate. Other countries such as China, Cambodia, Indonesia and India have low penetration rates, and temptingly large population bases. Malaysia’s cellular mobile subscriber growth is at 27 per cent over the last five years, hitting a total of 5.1 million subscribers, and penetration of 22 persons per 100 population in the year 2000 and now almost 6.8 million subscribers with a penetration rate of almost 29 persons per 100 population. Malaysia’s mobile position is somewhere in the middle. Malaysia is considered ’emerging’ in terms of communications spurred growth, with infrastructure ready and readiness to leap. Growth – Driven by the Right Policies? The Asia-Pacific region therefore offers large pockets of growth and is collectively considered a centre of new growth. Such diverse communications markets in the Asia-Pacific region have common bases in government-driven communications reform in terms of liberalisation policy, with focus on competition or building from low penetration rates. China, potentially the largest communications market in the world, is beginning to address the challenges of improving its communications infrastructure to support its rapid economic growth through avenues such as strategic joint ventures. However, there are issues. Many countries in the Asia-Pacific region need assistance. Not all are that well developed, and many do not even have what would be considered in Europe the basic communications needs. Countries in Asia-Pacific are looking for models and mentors-models to emulate and mentors to assist. For example, Malaysia is seen by some as a model for developing countries to emulate. We have the world’s first convergence legislation. In fact, India and Indonesia are very much looking at our framework and are adopting a similar approach to Malaysia. Whether this model will work for them, only time will tell, but we in Malaysia believe that our model will work for us. At the end, however, each country will have to find its own choice of a regulatory structure and methods of managing its evolution and determining the speed of growth of its communications market, its ability to attract the foreign capital required and all other steps necessary to fulfil its telecommunications needs. Regulation Viewed as a Partner of Innovation Regulation is essential from the fundamental perspective that it is intended to compensate for lack of real competition in an immature marketplace. In this respect, the communications market in Malaysia is at various stages of development-some services such as Voice over Internet Protocol (VoIP) and cellular mobile services are very advanced from a competition standpoint. However, fixed line services are still very much dominated by the former PTT, notwithstanding that the market was liberalised about five years ago. As a proactive stance before long-run decline in monopoly effectiveness, regulators in a number of countries have instituted open competition policies, reviewing dominant carrier controls or flexibly controlling market entry to effect competition. Malaysia has done so, and, as previously mentioned, other regulators in Asia-Pacific are taking a similar approach, though not necessarily through the same methods. In any case, some element of deregulation has initiated the platform for technology innovation to assist growth in the communications industry, especially from a consumer perspective. Media, content and information are in abundance, especially in Malaysia’s multi-religious, multi-racial, multi-cultural and multi-lingual society. Malaysia is poised to take advantage of this attribute, which is a privilege enjoyed by so few throughout the world. In Malaysia, the government has made conscious efforts to increase the development of the content industry from low levels. As mentioned earlier, we have a lot more room to grow. The government has introduced various content development initiatives through the E-village Project in the Multimedia Super Corridor. The programme is designed to attract world-class content companies to carry out their work in Malaysia where they would be creating employment for the locals and thereby promoting technology and skills transfer. Capital Investment for the Long Term Communications are the cornerstone of development-particularly multimedia content services-and should be recognised as such and treated as a long-term capital investment. Industry participants should not treat communications investments as you would treat a ‘fire and forget missile’. It should be viewed as a long path towards an interconnected world, providing infinite business opportunities along a time line towards a convergent environment. If the approach taken is merely to supply equipment and then leave the customers to figure out how best to deal with the issues facing them, then in the long run, no one benefits. Communications infrastructure development that means not only physical infrastructure but also the soft infrastructure, such as knowledge and skills, require affirmative action by the government together with the industry. Through combined strategic planning in nation-building, everyone will prosper. Prosper Thy Neighbour – Smart Partnerships Between Industry and Government On the international level, a similar approach should be adopted. Globalisation and the WTO loom in the horizon. Policies at the international level are mainly on standardisation and rationalisation; does this leave any room for developing countries such as Malaysia to have any say? On a regional level, the ASEAN countries follow the principle of prosper thy neighbour. Specific initiatives like e-ASEAN have a regional focus, notwithstanding WTO. When we help one another grow, we will all grow and develop. Liberalisation issues under WTO should not be to the detriment of local players, local industries and developing nations. Malaysia aspires to be a global hub for communications and multimedia, and there is also a need to reduce the digital divide between countries and within countries. There is a requirement for skills training centres, and this is where leading companies that have operations or facilities in Malaysia can provide the channel and the expertise. Such training should not be seen as only for Malaysia: skilled personnel could be trained for the Asia-Pacific region countries so that others can also benefit from another country’s growth. The ‘smart partnership’ between industry players and the government is one of the building blocks for Malaysia to achieve its intent of becoming a hub for communications and multimedia. In Malaysia, the convergent environment under the Communications and Multimedia Act 1998 has instituted new economic markets in terms of networks, network services, application services and content application services. The new markets are open and ready for innovative industry-led growth. There is a tremendous avenue for new business models and new ways of doing the communications business. However, it should be noted that the opening up of markets and introduction of competition, in line with liberalisation and globalisation, should not be detrimental to the local industries. There must be some appreciation of the level of development of the countries concerned and their capacity to compete. Technology as a Provider of Solutions to Problems In Malaysia, we focus on what technology can do for us to solve our problems and not technology for what it is. There is a need to focus on what the technology can do for us as opposed to what the technology can do per se. This approach is reflected in our licensing framework under the Communications and Multimedia Act 1998. The Need to Review Existing Issues Existing infrastructure has spurred the development of the country. However, a changing communications landscape requires regulators and industry participants alike to review what has been achieved and what are the future challenges. In order to retain a robust and dynamic communications environment, Malaysia, for example, may need to extricate maximum value out of networks and encourage rethinking of network utilisation by using innovative combination solutions such as fixed wireless solutions to deal with last mile issues. Conclusion In view of the various levels of communications development amongst countries in the Asia-Pacific region, with the diverse approaches and speed of progress and the digital divide, there is a need to do a stock take to assess where we are and where the specific needs are. Hence, potentialities of the region could be assessed and methods devised as to how best to tap them or obtain resource assistance, where required. There is a need to know the best practices that keep the communications growth formula vibrant in the rapidly changing communications landscape. A planned approach is required to strategise for maximum benefit on the part both of the country and of the industry service providers. This is certainly the case in Malaysia’s partnership with its ASEAN friends.

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