During the previous Pakatan Harapan administration, the then Transport Minister Anthony Loke had introduced a cabotage exemption for foreign ships repairing undersea cables in Malaysia. The decision was made to speed up undersea cable repairs in Malaysian waters as it took up to 27 days just to repair an undersea cable fault due to the time taken to apply for a domestic shipping licence. However, this exemption was revoked by Wee Ka Siong after he was appointed the Transport Minister in 2020. MyIX, an Internet Exchange organisation which connects ISPs to content providers, has renewed its calls for the government to reinstate the cabotage exemption policy for foreign vessels to conduct undersea cable repairs.
According to MyIX, this is among the investor-friendly policies which they are looking forward to strengthening Malaysia’s position as a regional tech hub. It explained that various foreign multinationals have already invested substantially in submarine cables connecting Malaysia to other parts of the world.
MyIX chairman Chiew Kok Hin said “As it stands, a growing number of data centre operators have moved and are moving to Malaysia to enhance data speeds to cater for densely populated cities within the Southeast Asian region.
“This includes hyper-scale data centres which offer robust, scalable applications and storage portfolio of services to individuals or businesses. Hence, a reinstatement of this policy would enable Malaysia to attract more submarine cable investments leading into Malaysia.”
Besides cabotage exemption for undersea cable repairs, MyIX also suggests having exemptions for telecommunication companies and data centres on potential increase in electricity tariffs to attract more foreign direct investment (FDI) into the country. It added that MyIX has consciously lowered the exchange’s port pricing by 33% last year, which benefits the country including members and end-users, and to further support the growth of Malaysia’s Digital Economy.
Long battle to reinstate cabotage exemption for undersea cable repair ships
In the past few years, MyIX and tech giants including Amazon Web Services, Facebook, Google and Microsoft have called upon the government to reverse its decision to revoke the cabotage exemption. After the exemption was revoked by Wee Ka Siong, the tech giants have expressed concerns over the decision which will impact Malaysia’s internet speed and quality, and they would review their cable investments in Malaysia
The cabotage issue was hotly debated in Parliament by Wee Ka Siong, Anthony Loke and Gobind Singh. Wee was criticised by the two DAP MPs for his ignorance of undersea cables when he said rerouting can be done in the event of a cable fault and there are local companies capable to carry out the repairs in Malaysian waters. MyIX explained that the tech giants would require Dynamic Position 2 (DP2) ships which were not available in Malaysia but Wee Ka Siong said their arguments were illogical and that DP1 vessels were sufficient.
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