Malaysia Emerging As One Of Asia-Pacific’s Key Digital Infrastructure Hubs

Malaysia’s Government is seen to reinvigorate the nation’s development surrounding digitalisation plans, easing its regulatory landscape and technology-friendly policies.

The prime objective is ensuring Malaysia emerges as one of the key digital infrastructure hubs in the Asia-Pacific region.

Fitch Solution’s Country Operational Risk and Industry Research Team, in a recent report ranks Malaysia as one of the top markets for regional and global infrastructure-led utility businesses under its aim to provide the appropriate platform for data centre operations.

“We do, however, highlight the fact that it has some of the least competitive labour costs in the region. The market has attracted major global players and the investment is growing considering the market’s strategic location and proximity to Singapore,” it said.

Fitch Solutions highlighted that Amazon Web Services (AWS) had unveiled plans to invest US$6 billion (RM27.05 billion) by 2037 to boost cloud services in Malaysia. AWS is planning to add three availability zones in the country to its 99-zone global portfolio across 31 geographic regions.

The firm said the move followed the signing of a central cloud computing contract by AWS, Google Cloud Malaysia, Microsoft (Malaysia) and Telekom Malaysia Bhd to upgrade Malaysia’s Public Sector Data Centre to a hybrid computing platform known as MyGovCloud.

Meanwhile, Malaysia’s national postal and parcel service provider, Pos Malaysia Bhd, is planning on migrating its information technology (IT) infrastructure to AWS by 2023, with the aim of reducing IT costs by 50%.

“Both the public and private sectors are experiencing robust digital transformation with the adoption of smart devices, demand for Internet of Things technologies and big data analytics,” it said.

Fitch Solutions said data centres cater for this growing demand.

It said major global players including Microsoft and Google had announced plans to build data centres without specific location plans as of March 2023.

According to Fitch Solutions, other players including Australia’s AirTrunk have pledged to build data centres in Malaysia. Equinix is spending US$40 million on a data centre in Johor, NTT Communications pledged US$50 million investment in its sixth data centre, and Bridge Data Centres already opened its facility in October 2022.

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