MyIX says regional subsea cable projects show cabotage policy tarnishing Malaysia’s tech allure

KUALA LUMPUR, Apr 1 — The Malaysia Internet Exchange (MyIX) said a forthcoming submarine cable project in the South-east Asia region was a lost investment opportunity for Malaysia.

MyIX chairman Chiew Kok Hin told Bernama that the government should reinstate the cabotage exemption for foreign specialised ships to maintain Malaysia’s cable infrastructure, saying global tech giants were otherwise shunning the country.

“It’s a shame as Malaysia has strengths in Internet infrastructure due to our strategic geographical location, ease of access, English-speaking population and relatively lower cost of entry,” Chiew said in a Bernama report yesterday.

He also said the cabotage policy ran counter to Malaysia’s MyDigital framework and must be addressed quickly if the country is to attract more submarine cable investments that were vital to technology firms.

“MyDigital is a strategic step in the right direction to further grow Malaysia’s digital economy and is anticipated to contribute 22.6 per cent of Malaysia’s gross domestic product while creating 500,000 new jobs.

“To achieve this aspiration, Malaysia would need very stable internet infrastructure that’s robust and reliable as internet usage would inevitably surge in the years ahead for government, businesses and the rakyat,” Chiew said.

Last month, social media titan Facebook announced two such undersea cable projects to link the US to Singapore and Indonesia here in a venture with Internet search giant Google.

A Facebook official said the cables — codenamed Echo and Bitfrost — would be the first to use a new route across the Java Sea, would increase transpacific bandwidth by 70 per cent, and was “a very material investment for [Facebook] in South-east Asia.”

“Echo” is a joint project between Facebook, Google and Indonesia’s XL Axiata that is scheduled for completion in 2023 while “Bitfrost” involves Facebook, Indonesia’s Telin and Singaporean conglomerate Keppel that will be finished a year later.

Last year, tech giants including Facebook and Google petitioned Prime Minister Tan Sri Muhyiddin Yassin to intervene in Transport Minister Datuk Seri Wee Ka Siong’s decision to eliminate the exemption, warning that this would hurt Internet infrastructure rollout here.

Wee eliminated in November the exemption put in place under the previous Pakatan Harapan administration and has repeatedly insisted this would not affect such development and investments in Malaysia.

The PH administration had introduced the exemption to expedite subsea cable repairs as it would otherwise deter foreign vessel operators from undertaking the work that local operators did readily not have the capability to undertake.