Half of Malaysians experience poor internet connectivity as digital divide hampers 5G goals

Half of Malaysia's 34 million population living outside the country's industrial and urban centres are making do with poor internet connectivity, the CEO of a regional telecommunication tower builder said, as the digital divide blunts the country's 5G ambitions.

About half of Malaysia's over 30,000 telecommunications towers are concentrated in just four of the country's 13 states - Selangor and Penang, the country's two most industrialised states, along with Negeri Sembilan and Perak - along the peninsula's west coast, EdgePoint CEO Suresh Sidhu told This Week in Asia.

"When the government says there's a communications deficit in Malaysia, there is and it's pretty large," Suresh said.

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"Digital transformation" is a tagline of Prime Minister Anwar Ibrahim's government, as underscored by the rapid rollout of new infrastructure in Malaysia to support the expansion of 5G high-speed connectivity.

Malaysia's 5G network is rated as among the fastest globally by network intelligence firm Ookla. It has so far reached 80.5 per cent coverage of populated areas and over 11 million subscribers as of February, according to government data.

The government has promised to ensure half of the country's rural areas will be covered by the 5G network, which it has said will boost productivity and growth.

It is a trend reflected across Asean. The total number of 5G users in the 10-member Association of Southeast Asian Nations is projected to surpass 200 million by next year, according to estimates by mobile network industry trade body GSMA.

But overall connection is patchy across the region, where transmission towers are concentrated in centres of commerce and industry, areas where tower infrastructure firms - also known as towercos - and network operators can earn the most.

This leaves significant segments of Southeast Asia's 675 million residents living in rural areas with slow and unreliable internet, exacerbating a digital and economic divide as urban centres race ahead at speeds matching their gigabits of data access.

Poor internet connection curbs progress across society. For rural students, it means limited access to learning resources that governments are placing online. For businesses aiming to expand their market presence, weak connectivity in rural areas is a major hindrance.

Suresh, who expanded EdgePoint's presence from its base in Malaysia to Indonesia and the Philippines within four years since it launched in 2020, said the trend was very similar across the three countries.

Collectively, he estimated the annual spending on tower leases across the three countries at between US$2 billion to US$3 billion, with plenty of scope for towercos to branch out across the rest of Asean. But much of the expenditure is focused on commercial centres like Java island, where Indonesia's capital Jakarta is located, according to Suresh.

"At least half the new [tower] builds are still in Java, so commercial [considerations] always trump people's decisions," he said. "It's a lot of towers they build, several thousand a year, but it's shared by a much bigger geography and more dispersed."

Suresh, whose firm was only the second multi-national towerco established in Southeast Asia managing over 14,000 towers, said despite efforts by Malaysia and Indonesia to extend rural coverage, the digital mismatch persisted in these countries due to issues limiting rural internet access.

A key barrier faced by regional countries was the lack of scalable rural infrastructure to install tower networks with the option of future expansion, he said.

"One thing we think is a problem is there's no backhaul," Suresh said, referring to an intermediary system that can link a core network to subsidiary networks. "You can have a [tower] site, but what will it connect to?"

Cost-effective and reliable technology to build such networks is already available, according to Suresh.

But the public and private sectors had to work together to narrow the connection gap between urban and rural areas, he said.

"I don't think anyone thinks it's a bad idea ... I think the way they're used to doing it is often prescribed in regulations and processes, and that's very difficult to change," Suresh said.

"Doing more of the same probably won't get you there and won't get you to 5G because 5G adds another layer of complexity."

Governments could help steer towercos and network operators to underserved areas through incentives such as cheaper site rentals or preferential spectrum pricing, Suresh said.

The relevant authorities should open up more broadband spectrum and make it available at a "more palatable cost" for rural users, he added.

This article originally appeared on the South China Morning Post (SCMP).

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