PETALING JAYA--National infocomm technology (ICT) association Pikom, is reiterating its call for the Malaysian government to boost broadband penetration and provide more incentives as a means to stem the country's slowdown in ICT spending.
At a media briefing Tuesday, Pikom Chairman David Wong observed that ICT spending in Malaysia had been severely affected by the global economic meltdown. This, he said, has negatively impacted Pikom members.
Pikom said it is co-organizing a month-long event, National ICT Month (NIM), comprising a leadership summit, exhibitions held across Malaysia and a campaign to encourage online shopping, among other activities.
The campaign is expected to help generate online sales of up to 100 million ringgit (US$28.5 million), as well as boost ICT spending by giving consumers an avenue to buy ICT products and services via the Web, from over 200 ICT merchants in Malaysia.
Wong said sales generated by participating vendors at its latest PC Fair, held across 13 Malaysian cities, dropped 10 percent despite recording a 6 percent increase in attendance. Held by Pikom every quarter, the PC Fair exhibition showcases ICT products and services targeted primarily at consumers.
He added that Pikom five-year forecast would have put Malaysia's ICT products and services revenue at 80 billion ringgit (US$22.8 billion) by 2012, from 40 billion ringgit (US$11.4 billion) in 2007. "We should have surpassed the 50 billion ringgit-mark (US$14.2 billion) this year but, to date, we've only reached 45 billion ringgit (US$12.8 billion)," he said.
According to IDC, IT spending in Malaysia is projected to dip for the first time in a decade, contracting between 1.8 and 3 percent in 2009.
Broadband key to national growth
To help put the country back on track, Wong urged the government to make broadband access a top priority, noting that its penetration is crucial to Malaysia's growth.
Speaking to ZDNet Asia on the sidelines at the briefing, he explained: "Currently, the pricing for broadband services in Malaysia is significantly higher than those offered in leading broadband economies in the region, and this effectively stymies the take up of broadband in the country."
According to Pikom, broadband household penetration in the country stood at 16.6 percent in the second quarter of 2008, a far cry from the government's target of 50 percent by 2010.
In addition to making broadband accessible, Wong said the government should also introduce incentives and tax deductions to encourage Malaysian companies to deploy business process outsourcing (BPO) services.
"The government should provide additional funds, grants and soft loans to assist local ICT companies in going global," he said. "It should allocate additional budget for implementation of strategic ICT projects to create employment, stimulate demand and improve efficiencies." Soft loans are based on below-market interest rate.
Other measures could include establishing open tenders for the procurement of ICT products and services, and providing incentives for ICT companies to build human capital development by nurturing unemployed and fresh graduates, Wong suggested.
Edwin Yapp is a freelance IT writer based in Malaysia.
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