Internet and e-commerce industry in Malaysia

Today, we are to find what Internet and e-commerce infrastructure in such Southeast Asian country as Malaysia is currently like. The country is a founding member of the Association of Southeast Asian Nations also participating in many international organizations such as the United Nations. As a former British colony, Malaysia is also a member of the Commonwealth of Nations. Malaysia also ranks among the Developing 8 Countries. Malaysia is also one of the region's top education and healthcare destinations. Malaysia is recognized as a newly industrialized country with GDP per capita equaled $8,141 in 2008 ranking it no. 65 globally. Malaysia is one of the key "Asian Tigers" as a consequence of its energetic efforts to transform itself into an information age nation.

Malaysia's telecommunications and broadband network is advanced relatively compared to other countries in South-east Asia. Thus, according to the worldstats.com data related to the second quarter of 2008 Malaysia accounted 16,900,000 Internet subscribers occupying the ninth position far behind China with 338,000,000 users taking the first place, Japan with 94,000,000 and India with 81,000,000 taking second and third places, respectively. Malaysia takes just 2,4% of Asian broadband market share. 

As for the Internet penetration, 356.8 % growth is seen for the period of 2000-2009. Thereby, for instance, in 2000 it was accounted 3,700,000 subscribes, or just 15% of the population. In 2005 the amount of subscribers doubled and reached 26,500,699, 37.9 %. Currently, over 60% of Malaysians can use Internet connection actively, with almost 17 million subscribers accounted. Ministry of Energy, Water and Communication targeted 50% household penetration by 2010. 

There is an increasing awareness of ICT progress in Malaysia. The ICT development plays an essential role in the government's plans for the economy. The government has targeting to position Malaysia as a regional and global ICT and multimedia hub, by providing tax breaks to attract multinational corporations and increase the companies' competitiveness through the development of the Multimedia Supercorridor (MSC) near Kuala Lumpur, the country’s capital. As the result, a large number of high tech companies from around the world have started setting up in Malaysia.

However, such encouraging efforts boosting the broadband technologies deployment have not been successful enough. Thus, while dial-up Internet connection is growing steadily, broadband Internet demand is lower. Lately, WiFi and hotspot have become the Internet connection platform that allures increasing number of subscribers. 

Besides, the other types of Internet connection services exist in Malaysia, such as cellular broadband, DSL connection, fibre optic, leased line, WiMax. So, the variety of Internet services providers supply web access across the country.  

As for the DSL broadband connection, Malaysia's largest ISP is Telekom Malaysia. At the same time, there are many ISPs in the country, TMnet Streamyx, Jaring Flite Wired, Maxis Wired, Time HomeNET, Time Biznet, Giga Broadband, Time Netlnyx, PersiaSYS Ultraband are among them. However, Telekom Malaysia's ownership of the nation's last mile connections restricts competition to densely populated areas in major cities. The company has a monopoly on the country’s broadband market, since there is no local loop unbundling.

As for the cellular broadband connection, it’s represented by Celcom, Digi, Maxis, UMobile, supplying with 3G, 3.5G (HSDPA) and EDGE connection with different speeds ranging between 224 kbit/s and 3.6 Mbit/s.

Fibre optic ISPs are represented by Cyberjaya Metro Fibre Network, CMFN supplying with Fiber-To-The-Building (FTTB) and Fiber-To-The-Home (FTTH), Metrofon, Penangfon, Time Fusion.

Wireless broadband connection is provided mostly by the following ISPs:

• JARING Flite Wireless – representing SOMA FlexMAX Mobile WiMAX System
• Time Webbit - WIMAXtechnology
• Axis Broadband 
• Izzi Broadband - IBurst technology
• Airzed - WIMAX technology
• Hotgate Technology Inc - Various broadband technologies
• Packet One - WIMAX technology
• AsiaSpace WiMAX (AMAX) - WIMAX technology

HotSpot Internet services providers are:

• Time ZONE 
• TMnet Hotspot 
• JARING Flite Wifi
• P1 Hot Zone
 
March, 16, 2007, Malaysian Communications and Multimedia Commission granted 4 Wimax license to the following companies:

• Bizsurf (M) Sdn Bhd 
• MIB Comm Sdn BhD 
• Asiaspace Dotcom Sdn Bhd 
• Redtone-CNX Broadband Sdn Bhd 

By the end of this year the Wimax companies are expected to provide their services to at least 40% of the population in the areas they control. The Internet access speed is expected to be no less than 1 Mbit/s.

Leased line, a symmetric telecommunications line connecting two locations, is represented by City Broadband, NasionCom Fixed Leased Line, Time NetLink and TMnet Direct. 

Malaysian national Internet top-level domain, or ccTLD, is .my or .com.my. Two year registration agreement for the first level ccTLD will cost $299. That is relatively high in comparison with Thai .th for $195 or Chinese .ch for $99. (http://www.rwgusa.com).

As for the current conditions and activity of e-commerce in the country it can only be described as sluggish. 

However, Malaysian e-commerce attracted much attention from governments, businesses and regional bodies. This importance has been attributed to several converging factors, such as the development of the use of the Internet as a means by which information is disseminated and through which communication and connectivity is enabled, the affordability of personal computers, increase in their computing capability, and the wide use of open standards.  

There is a high level of interest in e-commerce in the Malaysian government and in its resident information industries. Since 1997, the government has established an Inter-Agency Task Force on e-commerce to develop a national strategic action plan and recommend policy initiatives on security, encryption technologies, and transaction tracking mechanisms for facilitating e-commerce. 

According to Consumer Protection in e-commerce in Malaysia (2004), the main opportunities of e-commerce for businesses and corresponding benefits to consumers in Malaysia includes: 

• worldwide access and greater choice 
• enhanced competitiveness and quality of service 
• mass customization and personalized products and services 
• elimination of intermediaries and product availability 
• greater efficiency and lower costs 
• new business opportunities and new products and services.

According to the Nielsen Company 2007 research, 39% of Malaysians made their purchases online. 70% of the Internet users in Malaysia had made a purchase online at some point in the past. Online travel is a favorite e-commerce activity for Malaysians, with 55% of consumers buying airline tickets or made flight reservations online, while 41% said they had made hotel or tour reservations online. In 53% of cases residents name personal recommendations helping them decide where to shop online. 

As for the future of e-commerce in Malaysia and the Asia region it looks optimistic. The Malaysian Internet and e-commerce market has continued to develop by leaps and bounds. The successful development is reflected by increasing number of ISPs. As well as Internet penetration is growing rapidly, e-commerce is being in process of development and enhancing, and the popularity of all kinds of Internet and e-commerce services also strengthens.