CALL TO BOOST TOTAL ECOSYSTEM
Malaysia needs better power costs and regulatory framework to make it more conducive to firms, says expert
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