PIKOM ‘strongly urges’ Ministry of Transport to reinstate cabotage exemption

  • Stable connection, strong infra with fast repairs & installation crucial
  • Tech Investors may leave, MyDigital aspirations, competitiveness at risk

Danny Lee, chairman of Pikom warns of lose of investments and damage to Malaysia's digital economy if the cabotage exemption is not reinstated.

PIKOM, on Friday, issued a response on the cabotage policy. Chairman of the National Tech Association of Malaysia, Danny Lee said the current policy has affected not just the telecommunications and tech industries, but all sectors that rely on internet stability and strong infrastructure.

“A lot has been said in response to the cabotage policy, most expressing concerns that if not exempted for submarine cable installation and repairs, it will impact the economy and have dire consequences on tech investments. We are already beginning to see some multinational tech companies giving Malaysia a miss and others who are here, are also moving elsewhere,” says Lee.

"Submarine cables are the global backbone of the internet, and they play a critical role in Malaysia’s economy. The cabotage exemption is key to ensuring speedy repair of damaged submarine cables, thereby preserving internet stability, speed, and affordability,” he adds.

Most businesses today rely on the efficiency of the internet. The reversal of Section 65U of the Merchant Shipping Ordinance 1952 will greatly affect businesses that rely on the internet.

Pikom notes how access to the internet is more critical than ever during the MCO period. Malaysians rely on affordable, reliable internet access in order to work, continue their education, connect with friends and family, and access essential goods and services such as health care. It warns that this is an especially bad time to put this access at risk by making it more difficult for Malaysian internet service providers to repair critical internet infrastructure.

“The recently announced MyDigital blueprint provides a path forward in our digital journey. The critical success factor is execution of the plan. This current cabotage policy would not resonate well with our digital aspirations but rather hamper the progress,” says Lee who stresses that policy makers need to advise the government correctly, after weighing all perspectives from the private sector and the global outlook.

Failure to take the right action will put Malaysia at risk of losing its attractiveness as an investment destination for global tech companies. In addition to that, data centre investments are also making their way out of Malaysia, as repairs are now taking longer than they used to.

In responding to the notion that the cabotage policy would be one way to protect the country’s data security, Lee says, “Even if that can happen, there are always easier ways to steal data than from the bottom of the ocean. We should enhance our cybersecurity readiness throughout the chain including endpoint devices and the network to ensure encrypted end-to-end security.” What should be done is to raise investment in and focus on cybersecurity to enhance data security, he stresses.

“We strongly urge the Ministry of Transport to reinstate the cabotage exemption and begin a proper stakeholder consultation. This will help ensure reliable internet connectivity for all Malaysians, as well as Malaysia’s continued attractiveness as a destination for infrastructure investment," says Lee.

According to Datareportal, they are 27.43 million internet uses in Malaysia and this has increased by 2.8% between 2020 and 2021, while internet penetration stands at 84.2%. As the voice of the tech industry, where over 1000 corporate members conduct business online, PIKOM calls on the government to exempt submarine cable installation and repairs from the cabotage policy. This should the right thing to do in line with the MyDigital blueprint aspirations.

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