PIKOM urge the government to exempt cabotage for submarine cable installation and repairs

CABOTAGE policy affects not just the telecommunications and tech industries, but all sectors that rely on internet stability and strong infrastructure says Chairman of the National Tech Association of Malaysia PIKOM, Danny Lee.

“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 in a statement today.

“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 the speedy repair of damaged submarine cables, thereby preserving internet stability, speed, and affordability,” added Lee.

He added, most businesses today rely on the efficiency of the internet.

“With the reversal of Section 65U of the Merchant Shipping Ordinance 1952, it will greatly affect businesses that rely on the internet.

“During this MCO period, access to the internet is more critical than ever. 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 like health care,” he further added.

He said this is not the 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 the execution of the plan. This current cabotage policy would not resonate well with our digital aspirations but rather hamper the progress,” said Lee as he expressed his views on how policymakers need to advise the government correctly, after weighing all perspectives from the private sector and the global outlook.

Malaysia risks 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. In addition, what should be done is to raise investment in and focus on cybersecurity to enhance data security.”

“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,” concluded Lee.

According to Datareportal, there are 27.43 million internet users 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 be the right thing to do in line with the MyDigital blueprint aspirations,” added PIKOM.


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