Malaysia Budget 2022 Enterprise ICT Takeaways: Sustainability and 5G Ecosystem

Summary Bullets:

A. Amir

• Sustainability is becoming increasingly important and should be part of enterprise ICT solution propositions.

• The TPM innovation hub will drive the enterprise 5G ecosystem and development in the country.

The Malaysian government announced the country budget for 2022 last week, allocating MYR332 billion ($80 billion) on operating and development expenditure as well as the COVID-19 Fund. The theme of the budget is mainly around economic recovery from the pandemic and there are also various initiatives in the overall ICT industry such as connectivity expansion in underserved areas, more funds for startups, and additional digital adoption grants for enterprises. However, sustainability and 5G ecosystem are rather new and would have higher impacts on the domestic enterprise ICT market.

Sustainability and Environmental

Initiatives: The government announced several initiatives such as the Voluntary Carbon Market to facilitate carbon credit trading and the Low Carbon Transition Facility to drive enterprises to adopt sustainability practices.

Market Impact and Recommendation for Service Provider: These initiatives will drive enterprises’ awareness in sustainability. As carbon footprint will get measured, sustainability will become a key criteria in enterprises’ operations and expenditures including their ICT spending. The energy efficiency from new ICT solutions will be an important part of engagement with service providers. This will also drive enterprises to outsource more data and applications to greener third-party cloud and data centers. Larger enterprise are prioritizing suppliers which have committed to science-based targets to reduce greenhouse gases (GHGs). Enterprises will also consider solutions such as smart building, electric fleets, and other means to drive towards ultimately a net-zero strategy.

For service providers, energy savings should be included as part of their solution propositions for a better alignment with enterprises sustainability agenda. For example, having a carbon calculator as part of their offerings to demonstrate potential energy savings from a deployment. This practice is also becoming increasingly common in mature markets.

For more, please see:
1. Connected Technology and Data Are Part of the Solution for Environmental Sustainability, September 30, 2021.
2. IoT and Environmental Sustainability Can Come Together to Protect the Planet, September 10, 2021.

5G Ecosystem

The Initiative: The government announced plans to expand 5G coverage to 36% of high-density areas across the country. It also announced to build the ‘Innovation Hub: Industrial Revolution 4.0’, an innovation ecosystem center by the Technology Park Malaysia (TPM) with a focus on the development of emerging technologies such as drones, robotics, and autonomous vehicles. TPM shared after the budget announcements that the initiatives will go hand-in-hand with the 5G development as its facilities will be fitted with the latest cellular technology.

Market Impact and Recommendation for Service Providers: The innovation hub will provide a platform for enterprises, startups, and tech players to collaborate and co-create new 5G solutions. As the technology is still new, collaborations among industry players are crucial for service providers to understand enterprises’ requirements and develop solutions tailored for the market needs. It has also been proven in the more developed markets that 5G collaborations and solution co-creation often lead to successful commercial deployments. This is also a timely move as the network is expected to be commercially available soon, by the end of the year.

For service providers, while ecosystem development and solutions co-creation are crucial, access to the technology can be challenging due to the single wholesale network approach. Service providers could consider collaborating with TPM to join the initiative. This will provide access not only to the 5G technologies, but also other emerging technologies such as robotics and autonomous vehicles, as well as partnership opportunities with other technology providers, startups and industry players.

For more on enterprise 5G, please see:
1. 5G Watch Q3 2021: Network Rollouts and Customer Trials Dominate the Conversation in the U.S. and Europe, September 27, 2021.
2. ASEAN 5G Q3 2021 Roundup: Competition Heats Up, October 7, 2021.

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