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Foundations for a Digital Economy by Tan Tze Meng

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Foundations for a Digital Economy by Tan Tze Meng

  1. 1. 11 FOUNDATIONS FOR A DIGITAL ECONOMY THE CONTENT & SERVICES ECOSYSTEM 18-21st August 2014 MYNOG
  2. 2. 22 COMPARISONS BETWEEN CONVENTIONAL AND DIGITAL ECONOMIC MODELS ENERGY Centres of Economic Activity Economic Value Multipliers Centres of Economic Activity Logistics: Highways, Airports, Ports, RailwaysCities/Towns/ Villages CONVENTIONAL Cities/Towns/ Villages Cloud & Data Centres Connectivity: Telecoms, Internet, Broadband DIGITAL Cloud & Data Centres Multiplier Multiplier
  3. 3. 33 DIGITAL ECONOMY ECOSYSTEMS A Tale of Two Ecosystems A Comparative Look at Malaysia and Singapore
  4. 4. 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. 5. 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. 66 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. 77 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. 88 MALAYSIA: BROADBAND 2013 Malaysians are able to USE on average <3 Mbit/s Source: Akamai State of the Internet Q2 2013
  9. 9. 99 MALAYSIA: BROADBAND 2013 Malaysian premium users have access to on average 5.1 Mbit/s Source: HSBB = 667,880 subscriptions
  10. 10. 1010 APPENDIX CASE STUDY Broadband in South Korea 1996 - Present
  11. 11. 1111 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. 1212 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. 1313 SOUTH KOREA: BROADBAND 2013 50% South Koreans USE on average >10 Mbit/s Source: Akamai State of the Internet Q2 2013
  14. 14. 1414 SOUTH KOREA: BROADBAND 2013 South Korean premium users have access to on average >50 Mbit/s Source:
  15. 15. 1515 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. 1616 SPEED OF BROADBAND Broadband Speed and Impact to Contribution to GDP
  17. 17. 1717 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 DEFINITIONOF BROADBAND 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. 1818 CASE STUDY: G20 INTERNET CONTRIBUTION TO GDP
  19. 19. 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. 2020 MAGIC NUMBER:10 MBPS PER USER 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. 2121 ULTRA BROADBAND Unlocking the Full Potential of Fibre
  22. 22. 2222 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. 2323 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. 24. 24 IF TELECOMS ARE THE HIGHWAYS OF THE DIGITAL ECONOMY, THEN DATA CENTRES ARE THE CITIES.

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