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1 1
FOUNDATIONS FOR A DIGITAL ECONOMY
THE CONTENT & SERVICES ECOSYSTEM
18-21st August 2014
MYNOG
2 2
COMPARISONS BETWEEN CONVENTIONAL AND DIGITAL ECONOMIC MODELS
ENERGY
Centres of Economic Activity Economic Value Multipliers
Centres of Economic Activity
Logistics: Highways, Airports,
Ports, Railways Cities/Towns/ Villages CO
NVE
NTI
ON
AL
Cities/Towns/ Villages
Cloud & Data Centres
Connectivity: Telecoms, Internet,
Broadband DIG
ITA
L
Cloud & Data Centres
Multiplier Multiplier
3 3
DIGITAL ECONOMY ECOSYSTEMS A Tale of Two Ecosystems
A Comparative Look at Malaysia and Singapore
4
THE SERVICES & CONTENT ECOSYSTEM IN SINGAPORE IS MUCH MORE MATURE WITH INVESTMENTS FROM LARGE MULTINATIONALS
MALAYSIA SINGAPORE
? ?
Content and Services
Internet Content & Cloud
Data Centre Infrastructure
Telecoms, Fibre & Submarine Facilites
Mobility Infrastructure
Consumer Devices
?
5
POPULAR CONTENT AND SERVICES ARE MOSTLY OUTSIDE MALAYSIA DUE TO THE GAPS IN OUR ECOSYSTEM
Today, almost all the online content Malaysians use is overseas. The data travels over long distances on narrow “pipes” and that means slow access. That means Malaysia spends billions on international connectivity for inbound overseas content.
6 6
SITUATIONAL ANALYSIS MALAYSIA: BROADBAND TIMELINE
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Multimedia Super
Corridor
TMnet Launched as Malaysia’s second ISP after Jaring
115 Kbps
Limited Trial of HIS by TMnet
384 Kbps to
4 Mbps
Streamyx by TMnet
7 7
MALAYSIA: BROADBAND TIMELINE
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
50% Household broadband penetration (384Kbps – 20 Mbps)
RM$ 11.3 Billion PPP (RM2.4B Public funding)
NBI National
Broadband Initiative
HSBB: 10Mbps-1Gbps
BBGP: < 2 Mbps
HSBB 5-20 Mbps UniFi
Launch
HSBB 30-100 Mbps
UniFi Biz Packages
8 8
MALAYSIA: BROADBAND 2013
Malaysians are able to
USE on average
<3 Mbit/s
Source: Akamai State of the Internet Q2 2013
9 9
MALAYSIA: BROADBAND 2013
Malaysian premium users
have access to on average
5.1 Mbit/s
Source:
HSBB = 667,880 subscriptions
10 10
APPENDIX CASE STUDY
Broadband in South Korea 1996 - Present
11 11
CASE STUDY SOUTH KOREA: BROADBAND TIMELINE
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Focus on broadband
Korean Communications
Commission publicised
National Goals.
All large office and apartment
buildings Fiberised
30% of households
to have broadband
access through
xDSL or cable
80% of households connected at
20Mbit/s or more
Source: Korean Communications Commission
12 12
SOUTH KOREA: BROADBAND TIMELINE
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Plan to upgrade to
1 Gbit/s service by
2012
1Gbit/s Service
Available to 12,000
households
Source: Korean Communications Commission
US$ 24.6 Billion
1Gbit/s Service to be
available Nationwide
US$ 28.3 Billion
13 13
SOUTH KOREA: BROADBAND 2013
50% South Koreans USE on average
>10 Mbit/s
Source: Akamai State of the Internet Q2 2013
14 14
SOUTH KOREA: BROADBAND 2013
South Korean premium users
have access to on average
>50 Mbit/s
Source:
15 15
S. KOREA: VITAL STATISTICS
/ South Korea has 40.3 Million Internet Users
/ 82.5% Broadband Penetration (mobile+fixed)
/ US$52.9 Billion invested over 7 years
/ 98% of Internet Traffic in South Korea is LOCAL
/ US$1,312.5 invested in infrastructure per
Internet user
16 16
SPEED OF BROADBAND
Broadband Speed and Impact to Contribution to GDP
17 17
WHAT IS BROADBAND? 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
>0.2 Mbps
1.5-2 Mbps
>0.26 Mbps
4 Mbps
>0.38 Mbps
Kbps = Kilo Bits per Second = 1 Thousand bits per second Mbps = Mega Bits per Second = 1 Million bits per second
3 Mbps D
EFIN
ITIO
N O
F BR
OA
DBA
ND
In Malaysia, broadband penetration is measured using
0.384 Mbps as a minimum
In Singapore, the minimum broadband
speed available is
3 Mbps
18 18
CASE STUDY: G20 INTERNET CONTRIBUTION TO GDP
19
0
10
20
30
40
50
60
0 1 2 3 4 5 6 7 8 9
% > 10 Mbit/s
% > 10 Mbit/s
Countries with higher penetration of High Speed Broadband >10 Mbps show a greater positive impact to GDP by broadband.
Broadband % GDP Contribution
% High Speed Broadband Penetration
Source: BCG The Internet Economy in the G-20 -March 2012 Akamai State of the Internet Q1 2013
India China
UK
S. Korea
Japan
US
ECONOMIC IMPACT COMES FROM SPEED AND CAPACITY
Content Rich with Huge DC / Cloud
capability
Malaysia
20 20
MAGIC NUMBER:10 MBPS PER USER
670,000 HSBB
✔
17.7 Million
Internet Users
670k HSBB
3.3 Million
mobile broadband
13.7 Million
low speed
Internet
✔
✔
*estimate is benchmarked against South Korea investment of US$1,300 per person
Malaysia would need to invest about
RM60 Billion* This will require
significant contribution from foreign investment
21 21
ULTRA BROADBAND
Unlocking the Full Potential of Fibre
22 22
UNLOCKING THE FULL POTENTIAL OF FIBRE
Today, one pair of optical fibres can supply 9.6
Million Mbps Almost 10 Mbps each for 1 million people
COST: RM 10 per Mbps (point to point over 100 Km distance)
Current practice in Malaysia is that excess
capacity is held in reserve for future use, driving up
the cost per Mbps
COST: RM 2,000 per Mbps
(point to point over 100 Km distance)
23 23
REDUCING INFRASTRUCTURE COST CAN REDUCE OVERALL COST FURTHER
/ Deploying Optical Fibre has a cost of
RM150,000 – RM200,000/km
/ In Malaysia, civil infrastructure practices require
improvements in two key areas:
1. Infrastructure is rarely shared, with many exclusive areas
2. Major issues obtaining permits and rights-of-way from local authorities
(including trenches, tunnels, ducts, man-holes, poles, etc)
80% of the cost is the Civil Infrastructure
“Digging the roads and patching it up”
24
IF TELECOMS ARE THE HIGHWAYS OF THE DIGITAL ECONOMY,
THEN DATA CENTRES ARE THE CITIES.