Tech giants raise urgent concerns to Muhyiddin as cabotage issue puts MyDigital goals at risk

Despite the tussle between the Transport Ministry and the tech industry, it appears that the tech giants are still pushing to have the cabotage exemption reinstated for foreign ships that conduct undersea cable repairs. Based on a document made available to us, several companies which are believed to include Amazon Web Services, Google and Microsoft have written to the Prime Minister expressing urgent concerns over the revocation of the cabotage exemption made November by the Transport Minister Dr Wee Ka Siong.

This is believed to be the second letter from tech giants to the Prime Minister which raised concerns on the cabotage issue. It is said that the letter is also addressed to other ministers including the Saifuddin Abdullah (Minister of Communications and Multimedia), Azmin Ali (Minister of International Trade and Industry), Khairy Jamaluddin (Minister of Science, Technology and Innovation), Tengku Zafrul (Minister of Finance) and Mustapa Mohamed (Minister at Prime Minister Department for EPU).

The tech giants have reiterated that the cabotage policy negatively impacts Malaysia’s attractiveness as an investment destination for global tech companies. It also highlighted that the issue would also affect Malaysians and local businesses that rely on the internet for learning, communications and business.

The international tech firm have also expressed support for MyDigital that was announced by the Prime Minister two months ago. This is Malaysia’s initiative to transform the country into a high-income nation through digital economy development which would contribute 22.6% to Malaysia’s GDP and create 500,000 jobs.

They reminded the government that the revocation of the cabotage exemption which was originally introduced by the previous administration in April 2019, will affect MyDigital’s goal for Malaysia to have the highest number of submarine cable landings in Southeast Asia by 2025. As listed in the MyDigital blueprint, the submarine cable landings will provide the necessary infrastructure to improve broadband services and promote establishment of more data centres. Not only it will expand domestic data demand and creation but it would also attract international companies to set up data hosting facilities and expand other areas including digital content.

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Besides the submarine cable investments, the revocation would also affect other MyDigital objectives. This include data centre investments and to boost economic competitiveness through digitalisation and developing competitive digital talents which would rely on a reliable, robust and resilient internet infrastructure.

In February, the government had granted conditional approval to four cloud service providers (CSP), namely Microsoft, Google, Amazon and Telekom Malaysia to build and manage “hyper-scale” data centres and cloud services. During the announcement, the Prime Minister said the companies would invest between RM12-RM15 billion over the next 5 years.

At the moment, it seems that the Transport Ministry has yet to respond to the concerns raised by the tech giants. Recently, Dr Wee Ka Siong had called this publication (SoyaCincau) an untrusted source following our coverage of the cabotage situation. We have recently posed three questions for him to answer and invited him onto our platform to provide his side of the story. He has yet to respond to our interview request.


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Alexander Wong