CALL TO BOOST TO­TAL ECOSYS­TEM

Malaysia needs bet­ter power costs and reg­u­la­tory frame­work to make it more con­ducive to firms, says ex­pert

New Straits Times - - BUSINESS - FARAH ADILLA bt@me­di­aprima.com.my

UN­CER­TAINTY about power sup­ply and tar­iff, as well as broad­band costs, which ac­count for up to 40 per cent of op­er­a­tion ex­pen­di­ture, re­main ma­jor con­cerns among play­ers in Malaysia’s data cen­tre sec­tor, say in­dus­try play­ers.

As a re­sult, Malaysia stands to lose out to neigh­bour­ing coun­tries, par­tic­u­larly Sin­ga­pore, when com­pet­ing as an at­trac­tive in­vest­ment des­ti­na­tion, said Hi­tachi Sun­way group chief ex­ec­u­tive of­fi­cer Cheah Kok Hoong.

“It is all about to­tal ecosys­tem, from telecom­mu­ni­ca­tions such as broad­band cost per value to ta­lent pool and govern­ment reg­u­la­tory and sup­port frame­work.

“The Com­mu­ni­ca­tions and Mul­ti­me­dia Min­istry was work­ing hard to dou­ble the speed and lower cost but it re­mains a mis­ery un­til now, and a longer time is re­quired to ful­fil this tall or­der due to con­flict­ing de­mand and sup­ply that in­volves govern­ment-linked com­pa­nies,” he told NST Busi­ness re­cently.

AIMS Group chief ex­ec­u­tive of­fi­cer Chiew Kok Hin said Malaysia of­fers op­por­tu­ni­ties for data cen­tre set­ups, such as in Se­de­nak, and has all that it takes in terms of tech­ni­cal ca­pa­bil­i­ties to com­pete on a re­gional front.

How­ever, other el­e­ments such as power costs and reg­u­la­tory frame­work are not con­ducive to the lo­cal data cen­tre in­dus­try, he added.

“Sin­ga­pore has it right and was now har­vest­ing its suc­cess but we have larger land masses and con­nec­tions to In­dochina that we should lever­age,” he said.

Most data cen­tre play­ers sub­scrib­ing to Te­naga Na­sional Bhd’s C2 Tar­iff are pay­ing RM36.50 per kilo­watt hour (kWh) dur­ing peak pe­ri­ods, with an ad­di­tional charge of RM45.10 per kilo­watt (kW) for max­i­mum de­mand per month dur­ing peak pe­ri­ods.

Ear­lier this month, Face­book Inc an­nounced it would in­vest US$1 bil­lion (RM4.14 bil­lion) to build a data cen­tre in Sin­ga­pore, its first in Asia, pow­ered by re­new­able en­ergy and adapted to the citys­tate’s trop­i­cal cli­mate.

The cen­tre is ex­pected to be op­er­a­tional around 2022, and would host Face­book servers and cen­tralise its in­for­ma­tion tech­nol­ogy (IT) op­er­a­tions.

The 170,000-sq-m site in the city-state will be stacked over 11storeys, and will come with cus­tomed fea­tures to cope with the steamy tem­per­a­tures.

An­other giant IT player, Google, was re­port­edly plan­ning to launch its third data cen­tre in Sin­ga­pore, bring­ing its to­tal data in­vest­ment into the coun­try to US$850 mil­lion.

The first data cen­tre in Sin­ga­pore was con­structed in 2011, with the sec­ond fin­ished in 2015.

Since 2014, the lo­cal in­dus­try has been an­tic­i­pat­ing the setup of Mi­crosoft’s RM5 bil­lion to RM6 bil­lion data cen­tre in Ku­lai­jaya in Malaysia.

How­ever, the plan has been put on hold. Mi­crosoft was al­legedly still re­view­ing the plan which may in­volve the down­siz­ing the size of in­vest­ment.

Cheah Kok Hoong

Chiew Kok Hin

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