Tech companies say they may review cable investments in Malaysia

LAST week, at a meeting between officials from the Minis­try of Transport (MoT) — which included minister Datuk Seri Wee Ka Siong — and Google, Facebook, Microsoft and Malaysia Internet Exchange executives to discuss Malaysia’s change in cabotage policy, one of the tech giants said it would review its cable investments in Malaysia, a source familiar with the matter tells The Edge.

“One of the executives from a tech giant who was present said, ‘We need to rethink our cable investments in Malaysia.’ It was hard-hitting,” the source says.

Another tech company, it seems, had explained that cabotage policies were prepared in the 1980s for passenger ships and vessels carrying goods and are not meant for today’s digital economy.

“We [Malaysia] need to rethink the cabotage laws because these [laws] were [implemented] when communications was analogue and not digital,” the source says, quoting one of the participants.

Cabotage basically involves laws to protect the domestic shipping industry from foreign competition and preserve domestically owned shipping infrastructure for national security purposes, among others.

The meeting last Wednesday took place for the MoT to give a clearer picture on the national cabotage policy, electronic domestic shipping licences (DSL) and the capability of local vessels in repairing undersea cables.

How successful the meeting was remains to be seen.

Before parting ways, the tech giants are understood to have asked for some of Wee’s recommendations to be made in writing. This, it seems, includes Wee’s saying that the red tape for undersea cable repair works could be shortened by up to 10 days using local companies, compared with 27 days previously (see chart).

Wee did not respond to requests for an interview on the matter.

The meeting came about after Wee exercised his powers under Section 65U of the Merchant Shipping Ordinance 1952 and revoked the exemption for cabotage policy for submarine cable repair vessels on Nov 13.

The argument put forward by tech giants Google, Facebook and Microsoft, among others, is that there is a scarcity of Malaysian-flagged vessels that can undertake submarine cable repair, so why prevent foreign-flagged ships from operating?