This article first appeared in The Edge Malaysia Weekly on March 15, 2021 - March 21, 2021

Connectivity is undeniably the foundation of the Malaysia Digital Economy Blueprint as the majority of the initiatives will not be able to take off if communications coverage is not spread evenly throughout the country.

In the blueprint, connectivity initiatives include heightening rural and education connectivity, a review of laws and legislations to enable broadband to be mandated as a utility as well as the rollout of 5G.

Generally, industry players are optimistic about the plans to roll out and expand connectivity coverage nationwide and lauded the idea of doing so in stages as technology tends to advance rapidly. This approach would allow the government to adjust and pivot its plans in the event that something better emerges, such as 6G.

Undoubtedly, the convergence of science, technology and innovation coupled with adequate access and connectivity will allow Malaysia to stand out globally. The initiatives being put in place have the potential to strengthen the global supply chain and inadvertently, make trade more inclusive with smaller countries.

But at the same time, some players are concerned that the five-year connectivity timeline may be too long and thus, cripple Malaysia’s ability to adapt to the technologies that emerge by 2025.

“By 2030, we won’t be talking about Industry 4.0 or blockchain, as these technologies may be commonplace by then. The current blueprint may not position us in a way to help take advantage of whatever is going to be hot or up-and-coming by 2030,” says Aaron Sarma, a general partner at ScaleUp Malaysia.

“What I’m proposing is to have an 18-month rolling plan where the government can execute and iterate plans in that time frame and update or change the plan every 18 months to keep up with the times.”

Professor Mahendhiran Sanggaran Nair, pro-vice chancellor (research engagement and impact) at Sunway University, believes that the blueprint addresses the issue of connectivity within rural communities adequately. This is something that’s also seen in the Shared Prosperity Vision 2030, where the discussion is focused on humanising technology and improving the quality of life in every segment of the population.

Nevertheless, digital infrastructure is critical for rural communities as it leads to better access to education and information, he says. “It is vital that the infrastructure penetrates the rural and vulnerable communities. MyDIGITAL puts a lot of emphasis on ensuring the infrastructure does make a difference to all segments of the population.”

Xair group of companies managing director Nor Zachy Fernandez explains that a telecommunications (telecoms) operator has to calculate its return on investment (ROI) before setting up connectivity infrastructure in an area. From there, the operator will go down the list, setting up infrastructure starting with the most densely populated rural areas to the least dense.

This strategy makes sense for telecoms companies (telcos) as they will need revenue to sustain the infrastructure. But at the same time, the government should allocate some towers in areas that are less dense because it will take time for the telcos to reach these places.

One way to address this issue is to go back to the fundamentals of the Universal Service Provision (USP) fund, which is administered by the Malaysian Communications and Multimedia Commission (MCMC). The fund requires all communications licence holders (except those with a Content Applications Service Providers licence) that make more than RM2 million a year to contribute 6% of their “weighted net revenue” to the fund.

“The fund was set up to provide connectivity in areas where it is very difficult for telecoms operators to bring connectivity. I don’t know how the sites are selected by MCMC, but we still have areas that the telcos will take forever to reach. This should be addressed,” says Nor Zachy.

Dr Rachel Gong, senior research associate at the Khazanah Research Institute (KRI), says that while it is great that broadband will be looked at as a basic utility, the government’s efforts should really reflect that this is something it will pay for without expectation of profitability or returns.

In this regard, there needs to be more accountability and transparency for the USP fund, as well as how much is available. “It is a sizeable fund, but is it used effectively? Is that money efficiently used for the cause? If the primary priority is basic connectivity, the focus should be on fibre optics infrastructure and strengthening 4G, and not really focusing on 5G just yet,” she says.

“It’s like running water. You may have it, but the supply depends on how thick the pipes are. And if you turn on a tap, pressure is decreased at another tap and so on. But once the basic piping infrastructure is right, a lot of things can be done to improve the experience, like water heaters, for example. We need to get the basics right before other things can be done.”

Connectivity needs to be addressed not only in rural areas, but also in urban cities. Muhammad Nazhan Kamaruzuki, research associate at KRI, says the quality of mobile service indoors is a very common problem, especially in residential and office buildings. This is due to signal degradation, which affects the quality of service even if the user gets the most advanced network coverage.

“Indoor network problems require radio frequency tests to be carried out to see the extent to which improvement work is needed. Devices such as small cell antennas and repeaters are said to be the way to improve indoor coverage, which is where 5G could come in,” he says.

“However, this requires a consensus among telcos, building owners, tenants and facilities managers as well as local governments. Any installed devices must also meet the standards set by MCMC. The purchase, use and possession of a non-standard cellular booster or repeater is totally prohibited. The question remains as to who will fund the process to improve the quality of network services indoors.”

Veveonah Mosibin from Sabanalang Pitas, Sabah, is synonymous with the plight of remote and rural communities that do not have proper access to the internet. Her story made the headlines around the world and raised the question of the government’s commitment to reaching out to such communities.

ScaleUp’s Sarma says what people tend to forget is that she could get internet connectivity but she had to be up in a tree. This means the internet connectivity in the area was not extended to where she was living. Thus, the question should be, why not?

“I think this is where the government can provide rebates or incentives for telecoms operators to extend their coverage because it could be that there is nothing in it for the telcos. It’s a commercial challenge because the telcos may not want to put up a tower in an area to service only 500 people,” he says.

To address the urgent need for connectivity after Covid-19 hit, the national digital infrastructure plan — Jalinan Digital Negara (Jendela) — was introduced. Muhammad Nazhan says it outlines the government’s aspirations and targets over the next five years, such as achieving 100% 4G network coverage with a speed of 100Mbps. He adds that there shouldn’t be any problems in achieving this target earlier than planned and lauds the government’s response time to the nation’s connectivity needs.

To be prepared for events such as Covid-19, Muhammad Nazhan proposes a second core thrust in the development of telecommunications infrastructure, which is to have reliable infrastructure and address redundancies. “For example, last year, MCMC stated that only 40% of telecoms towers were integrated with optical fibre. Thus, our infrastructure initially could not accommodate the soaring data traffic when the Covid-19 pandemic happened,” he says.

Muhammad Nazhan points out that the current mandatory standard for the quality of service needs to be reviewed as well as to be in tandem with the efforts to achieve Jendela’s aspirations. Not only that, standards such as minimum download speeds should be more relevant to the growing needs of mobile broadband users.

“Because there is still a technological gap in the infrastructure [only 40% of telecoms towers are integrated with fibre optics and there are still towers that only provide 3G network service], the reliability of the infrastructure can be a new element in the mandatory standards of service quality. This would demonstrate industry players’ continuous commitment to providing reliable infrastructure,” he says.

While long-term connectivity measures are needed, Nor Zachy says the government should come up with more short-term fixes to address dire connectivity needs such as for online learning. He urges the government to take a proactive approach like what is being done in Pakistan, where its government has created a list of approved vendors to deploy operator-independent wideband repeaters.

In Pakistan, these repeaters can be deployed without the consent of the operator to enhance the coverage of areas with little to no connectivity. “These repeaters do add some active noise to the connectivity networks, which is why in Pakistan, they are invalidating and blacklisting vendors that put up devices that contribute a lot of active noise,” says Nor Zachy.

“This allows villages to pool their money together to put up one repeater at their own cost, and not funded by the operator. And just like that, they have connectivity.”

By solving the basic connectivity issue, the issue of education connectivity will inadvertently be resolved.

An interesting aspect addressed in the blueprint is the “My Digital Teacher” programme, which is set up to encourage teachers to fully embrace the use of digital tools and technology in the classroom. The definition of connectivity in the education space has a deeper meaning as it is not only focused on getting schools connected to the internet and for students and teachers to have adequate devices, but also on the upskilling of teachers.

The deployment of the special purpose vehicle (SPV) for 5G rollout is a good move taken by the government, says Nor Zachy, as he believes it takes into consideration why telcos are reluctant to roll out 5G. Right now, the hypothesis is that 5G is an advanced and possibly less needed solution that may not be commercially viable. But with the SPV, the government can use its funds to fast-track the rollout of 5G, he adds.

This means the government will have its own 5G network, after which there will be a demand for 5G devices that require 5G solutions. “So, it’s like the government is saying, ‘I’m going to build it and whoever wants to have 5G can deal with us’. That’s a good move,” says Nor Zachy.

“Without the deployment of the network, 5G devices will remain expensive and people will not want to get it, which feeds the perception that it will remain an elite solution.”

Nevertheless, strengthening the connectivity infrastructure and 4G networks will lay the foundation for the 5G rollout, says Mahendhiran. This is a crucial part of 5G as it will aid in digital transformation initiatives.

He says it’s a good thing that the 5G rollout is happening in stages as most countries in Asean are using the same strategy. “Even in Singapore, a small city state, we don’t expect a full 5G rollout until 2024 or 2025. And countries in the region, Malaysia included, are watching Singapore so they can address the issues and gaps seen there.

“The industry is carrying out 5G pilot projects while looking at Singapore as an example. Our own pilots will then tell us what the right processes are and what process changes and business transformations we need to make on the ground to ensure that 5G adoption is done seamlessly.”

One issue that Mahendhiran brings up is the extensive research into 6G technology that is going on right now in countries such as China and Japan. He believes that in the next five years, the world will start seeing 6G, which will come through much faster, and possibly full deployment by 2030.

“As someone who does a lot of technology forecasting, the question is whether 6G will use the same platform as 4G and 5G because it may completely disrupt the latter. This is why I think taking a staged approach is good, so that if something new comes about, we can adjust,” he says.

The advancement of deep tech needs data, says Wise AI Sdn Bhd co-founder and CEO David Lim. This can only be obtained via devices that are connected to the internet. He points out that with the 5G rollout having better and enhanced speed, more data can be collected to enable technologies such as data analytics and artificial intelligence to function better.

Legislative changes are needed to enable broadband to be mandated as a utility, putting it on the same pedestal as water and electricity. Sunway University’s Mahendhiran says the Local Government Act 1976 needs to be amended to ensure that all the localities have access to fibre optics.

Nor Zachy, for one, has been advocating for broadband to be mandated as a utility for some time now. “My hope is that more emphasis is placed on fibre connectivity. At the very least, for funding to be provided for all state and federal ministries to be connected via fibre optics,” he says.

The move to amend laws and regulations will allow property developers to put in the infrastructure needed to make broadband a utility, but the concern is who will bear the infrastructure cost as it may drive up property prices, says Sarma.

Mahendhiran shares similar concerns and points out that local governments and property developers need to come together to address this issue as the cost of properties is likely to increase if it is left to the developers to provide broadband as a utility.

Nevertheless, he believes that when broadband has been successfully deemed a utility, the demand for smart homes will rise. As more people use smart home features to monitor their usage of electricity, water and other home services, economies of scale will come into play and may drive down the prices of public utilities and home services over time, he says.

“With institutional transformation and regulatory reforms, new markets will be unleashed, offering new services to improve one’s quality of life. So over time, we will see much better access to housing,” says Mahendhiran.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.