The Future Path of Malaysian Telecommunication Industry


The era of the industrialization and information age has made the telecommunication industry expanded into diversified functionality to support the growth of technological advancement for better services demanded by any particular nation. In Malaysia, telecommunication industry is now considered to be prominent due to its contribution as a tool of technological support for the national development in line with the national aspirations. Hence, this paper will try to explore certain developmental features in the telecommunication industry that will portray the future path of such industry in the next coming century to "comfort" the nation as a whole through its available and possible services.

Global Development of Telecommunication Industry

There is no doubt that the developments of telecommunication industry and its technological infrastructure throughout the world have influenced the robust evolution of information industry. Thus, such phenomenon has contributed to the introduction of various newly sophisticated related technologies. In fact, telecommunication and information industries are very best described as "twin technology". In general, most people relate that telecommunication industry is a catalyst and the backbone for better services of broadcasting and communication services. Nowadays, especially in the most sophisticated information age, the industry also bares responsibility to create a global information societies throughout the world via integrated technological network.

The positive development of this industry does not only rely heavily on its services but it is also a demanded business due to its high profit to generate revenue. For instance, the IT industries throughout the world that are supported by the telecommunication infrastructure have contributed to an investment value of AS$500 billion. To some countries, including Malaysia, this industry will support to improve the economy besides other salient features such as its nature of environment friendly. From the existing telecommunication network, many countries have utilized such infrastructure effectively to comfort and upgrade the living standard of their nations and enhance other industries such as broadcasting and communication to a better scenario. In the United States, 95% household has television, 1/3 of the American has computer and 1/5 of them would communicate by utilizing telephone services (conventional and mobile communication). In fact, in Japan, mobile communication is being utilized at optimum by the new Japanese generation. Such facility is considered to be a "must own" item. The mobile communication is very effective due to technological supports (some have been promoting digital technology) provided by many telecommunication operators in Japan. All of these scenarios have influenced other countries to give more attention to the development of telecommunication industry in their countries.

The Scenario of Telecommunication Industry in Malaysia

In Malaysia, the industry has aggressively developed through many years starting from telephone and telegraphic services after the First World War to sophisticated telecommunication network using fiber optic cable, microwave and satellite system to link the communities in the rural and urban area. This evolution has encouraged stirring a rapid growth of other services such as mobile telecommunication radio, trunk radio, paging system as well as data services including switching services, telefax, datel, etc. The industry is not only making progress by itself but also getting a strong support from the government too.

In 1987, the government through its "Malaysia's Incorporation" policy had agreed to take out one of the government functions related to telecommunication to be operated in more diversified means by corporatizing Telecom Malaysia. It is a government-owned company. Few years then, this company was privatized via "Malaysia's Privatization" policy. Thus, the Ministry of Energy, Telecommunication and Post is responsible to formulate policy related to the short and long-term courses of telecommunication sector while the Malaysian Telecommunication Department is responsible to monitor the progress of that particular sector.

The Recent Telecommunication Policy

Based on the recent policy, the telecommunication industry has been channeled to foster a creation of information-rich and intelligent nation via supreme telecommunication facilities and network. In the micro objective view, the policy strategizes several steps to be followed. The writer will only touch several issues.

First, the available services should be expanded in more systematic and comprehensive manner. By the year 2020, the telephone line penetration rate for the nation is fixed at 50 telephones per 100 people in the rural area. The government will also give license to certain telecommunication operator if necessary to supply infrastructure and services in the long-term plans for the sectors. In order to maintain a reasonable cost, the government will always revise the tariff rate for telecommunication services. In term of telecommunication infrastructure, the network will utilize fiber optic, microwave and satellite systems at optimum. Besides doing all these, the social objective will not be ignored by any telecommunication company especially the carrier-network provider to supply and upgrade the telecommunication facilities in the rural area.

Second, competition will be encouraged to guarantee quality services but the degree of competition will always be analyzed in order to avoid any defect in the telecommunication sector. In addition, the government does not want to see any local entrepreneur to face difficulties at the later stage. Competition is necessary but it has to be done in healthier environment and equal opportunity is guaranteed to all competitors rather than hampering each other.

Third, the criterion to conduct research and development activities is one of the important features to get an issuance of license. Incentives will be honored also for R&D activities. R&D should also be made in the fields of cellular technology, fiber optics, satellite system and others. Such enforcement will enhance the application of technology in the telecommunication industry.

Fourth, Malaysia also has to have a better international strategic interaction with other countries that are very well experienced in the telecommunication sector. Basic and advanced facilities to link this country with the rest of the world are needed to make Malaysia to serve as a regional and international telecommunication hub. Malaysia can also be linked with other countries through satellites.

In strengthening those few mentioned strategies, the government also has set guidelines for the development of telecommunications services. The structure of the telecommunication sector will be divided into network infrastructure and telecommunication services. Concerning infrastructure network, two types will be prioritized and there are corporate telecommunication network and IT superhighway network infrastructure.

The telecommunication sector will also restructure the basic telephony services, supplementary services (payphone, telefax, leased circuit, toll free number, voice information, faxplus, etc.), data and information facilities services (MAYPAC, MAYCIS, DIGITALINE and IDSN services), messaging and text transmission services, radio communication services (conventional radio service, mobile radiophone service, trunk radio, pager, cordless telephone service, etc) and the satellite technology services. In addition, new services are encouraged such as IRIDIUM Project 21, INMARSAT, PCN/PCS video conferencing and telecommuting.

A Brief Comment

By looking at the strategies and related information, it is clear that Malaysia is very serious to foster the telecommunication industry. The industry is expected to move in a viable direction and thus bring a better living scenario of her communities in order to establish a model of information-rich and intelligent nation via supreme telecommunication facilities and network. This is implemented through structural means to avoid the society from loosing her grips in term of preserving the positive culture of the nation or in another word; the social safety net will always be in place.

Malaysia has launched her communication satellite named as MEASAT 1(January 1996), MEASAT 2 (early 1997) and will launch another satellite late of this year or next year. These satellites are to improve the technology use in the telecommunication industry and those related to it. These projects have introduced digital satellite broadcasting with twenty-two television channels and eight radio channels. These systems will also be used as an interactive multimedia platform to deliver a wider range of services such as homebanking, home shopping, stock exchange information, and Internet access. This progress also has made Malaysia as a broadcasting and information center for the South East Asia region. Yet, every strategy is taken according to the Malaysian outlook and implemented cautiously. In broadcasting; for instance, V-Chip will be introduced to the nation so this will able them to monitor the television program in more controlled manner and avoid their children from getting bad influences of pornography, sex and violent features.

Telecommunication sector is actually supporting the robust growth of multimedia industry. In fact, the Internet subscribers in Malaysia have increased to 250,000 users. In the late 80's and 90's, Malaysia has been very busy setting up various mega projects to support such ideas. Multimedia Super Corridor that encompasses also two intelligent cities, Cyberjaya and Putrajaya, is fulfilling the requirement.

Kuala Lumpur Tower is established to strengthen the telecommunication sector in more fashionable ways. All local telecommunication operators such as Telecom Malaysia Sdn. Bhd., Cellular Telecommunication Sdn. Bhd. (Celcom), Binariang Sdn. Bhd., Mutiara Telecommunication Sdn. Bhd., Times Telecommunication Sdn. Bhd. and Telefon Wireless (M) Sdn. Bhd. are urged to upgrade their services by coordinating their services through an integrated access system where such action will enable every client to receive a quality service especially in the mobile communication industry. The billing process will be based on the coding system (each company will be presented by codes) chosen by a client; for instance, code 181 is for Telecom; 182 - Binariang; 183 Time Telecommunication; 186 Mutiara Telecommunication; and 189 - Celcom. This project will be commencing on January 1, 1999.

Since the telecommunication and IT industry are essential to the technological advancement in Malaysia, many elements of practices have to be reviewed. Hence, the government proposes a new law to replace the existing law by submitting the Communication and Multimedia Law 1998 in the parliamentary session in 1998. One of the important provisions in the new law is to establish a new Ministry so called the Multimedia Ministry to guide the telecommunication and IT industry in more viable ways in the future. This implementation will definitely affect the restructure of Ministry of Energy, Telecommunication, and Post and Ministry of Information (responsible for broadcasting in Malaysia at present). This issue is still debatable but the law will definitely be enforced next year.



These progresses are not a dream that encapsulates with unreal events and nightmares, but they are the vision that will bring the nation to stand on his or her feet as tall as the other nations around the world. There is no doubt that telecommunication sector will be expanded farther and further after the government of Malaysia has agreed to focus more attention on the Space Industry. In conclusion, Malaysia has not make a mistake when they invest more money in the telecommunication industry that will definitely uplift the nation into a new culture of civilization in the world and such measures are contributing to another culture of excellent.

Azman Mohd. Yusof

Communication Policy,

Graduate School of Policy Science, Saitama University

September 11, 1998