Social media giant put off by transport minister’s reversion to ‘protectionist’ rules, say insiders
KUALA LUMPUR : Facebook Inc has put on hold the landing of two undersea cables in Malaysian waters due to a policy championed by Transport Minister Datuk Seri Wee Ka Siong, a move that could hamper the country’s ambitions for better internet connectivity, people familiar with the matter tell The Vibes.
It is understood the social media giant had wanted to deploy two more submarine internet cables following the completion of an earlier project, called the Bay to Bay Express Cable System, which has a pit stop in Malaysia.
But, following Wee’s removal of the cabotage exemption policy put in place by his predecessor, Anthony Loke, Facebook has “KIV-ed the landing of two more cables”, said an insider.
This might, in turn, affect the country’s digitisation push, including investments, therefore hampering efforts to provide better internet connectivity throughout the country, the source added.
When asked to confirm whether the cables project has been put on hold, Facebook told The Vibes in a statement today that it is “committed to supporting digital economic development and will continue to evaluate investment opportunities to create a more connected community in Malaysia.
“We have no further updates to share.”
Wee has been receiving brickbats from stakeholders for undoing Loke’s policy, in place since April 2019. Back then, internet giants had lauded the move as it would help speed up repairs and allayed fears of prolonged internet disruptions.
The latest flashpoint, however, arose earlier this month when news outlets reported that Facebook was deploying two cables – Echo and Bifrost – from the US to Indonesia, with a pit stop in Singapore.
Market participants, such as the Malaysian Internet Exchange (MyIX) and opposition politicians, chided the missed opportunity as a sign that Malaysia is paying a high price for Wee’s about-turn.
The reversion to the old policy had been criticised as “protectionist” by stakeholders, and is riddled with delays due to requirements that foreign-flagged vessels apply with the Transport Ministry and the Malaysia Shipowners’ Association (Masa), pending a mediation process.
Masa has the right to jam applications in favour of Malaysian-flagged ships, but that move has come under fire as only a single company – Optic Marine Services (OMS) group – can undertake repairs.
Sighted correspondences with government agencies showed there had also been concern over its track record in performing repairs, among them the lack of proper equipment, including vessels.
Tech giants such Facebook and Google prefer a Dynamic Position 2 (DP2) cable repair ship.
OMS recently acquired the CS Lodbrog vessel that can perform undersea cable repair and maintenance. It also has another Malaysian-flagged vessel, Cable Orchestra (previously the Fu Xing), a barge that has done some repairs in local waters.
After undoing Loke’s policy, Wee had issued a few statements, including a lengthy interview with business publication The Edge, to clarify his policy choices, including reassuring stakeholders that Masa would not jam applications or interfere moving forward, but work to expedite applications from foreign vessels.
More recently, Wee issued a statement last Sunday rebutting MyIX over projects Echo and Bifrost, saying previous projects bypassed Malaysia, that tensions in the South China Sea had spooked companies from installing undersea cables in the region, and the country lacked data centre infrastructure.
He added that the revocation of the cabotage policy would reduce the outflow of foreign money, lower the country’s dependence on foreign vessels and increase local capacity for such jobs.
Wee’s latest statement drew further criticism, including from the likes of Malaysia Digital Economy Corporation chairman Datuk Rais Hussin, who tweeted that the minister should verify his statements as data centres have existed in the country since the 1990s.
Tech observers, however, told The Vibes that the government has to strike a balance between protecting national interests and drawing in investors.
“A middle ground would be to reinstate the cabotage exemption while building local capacity,” a source said.