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FOUNDATIONS FOR A DIGITAL ECONOMY

THE CONTENT & SERVICES ECOSYSTEM

18-21st August 2014

MYNOG

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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

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DIGITAL ECONOMY ECOSYSTEMS A Tale of Two Ecosystems

A Comparative Look at Malaysia and Singapore

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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

?

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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.

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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

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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

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MALAYSIA: BROADBAND 2013

Malaysians are able to

USE on average

<3 Mbit/s

Source: Akamai State of the Internet Q2 2013

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MALAYSIA: BROADBAND 2013

Malaysian premium users

have access to on average

5.1 Mbit/s

Source:

HSBB = 667,880 subscriptions

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APPENDIX CASE STUDY

Broadband in South Korea 1996 - Present

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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

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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

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SOUTH KOREA: BROADBAND 2013

50% South Koreans USE on average

>10 Mbit/s

Source: Akamai State of the Internet Q2 2013

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SOUTH KOREA: BROADBAND 2013

South Korean premium users

have access to on average

>50 Mbit/s

Source:

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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

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SPEED OF BROADBAND

Broadband Speed and Impact to Contribution to GDP

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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

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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

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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

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ULTRA BROADBAND

Unlocking the Full Potential of Fibre

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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)

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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”

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IF TELECOMS ARE THE HIGHWAYS OF THE DIGITAL ECONOMY,

THEN DATA CENTRES ARE THE CITIES.