Connectivity a boost for Sarawak’s economy

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Sacofa’s Managing Director and CEO Dato Ir. Abg Jemat Abg Bujang

Sacofa defines itself as the technology and telecommunication flagship company in Sarawak. As a government-owned agency, Sacofa manages and facilitates telecommunication basic infrastructures on the concept of sharing. This includes high-speed internet access and mobile telephony networks. Inside Investor talked to Sacofa’s Managing Director and CEO Dato Ir. Abg Jemat Abg Bujang about the objectives of the company.

Q: What is the current coverage of mobile telephony in Sarawak?

A: At the moment, all the urban areas are covered with cellular and wireless connections, but in the rural areas it is only about 80 per cent. We are constantly building new lines and towers, but I think we need more towers especially in the rural areas. Communities are quite scattered in Sarawak, and it is a big challenge to reach all the people in rural areas via the cellular network.

Q: What is your roadmap to cover all the people in Sarawak?

A: Currently, we have about 700 towers available to connect people with mobile and wireless services, but we need to at least double this number to cover the rural areas.

Q: Where are the investments coming from?

A: There is a government allocation of funds under the Universal Service Provider Fund. Every telecommunication license holder has to contribute to this fund. We are using this fund to expand the rural network coverage. I believe, over the next five years, more funds will be allocated to Sarawak as we have a lower coverage than the rest of Malaysia.

Q: What about the internet penetration?

A: It’s at about 47 per cent, still very low, so a lot more funds have to be pumped to Sarawak to tighten the network.

Q: There have been talks about a possible IPO of Sacofa, are there any news on this?

A: We have been thinking about it, but there is actually no plan on it yet. We are committed to the people of Sarawak, and if we would be publically listed, it would be more difficult to implement what the government wants. Of course we could use the money from an IPO, but currently there are no steps being taken in that direction.

Q: Which are the companies that are using the shared services?

A: Almost all of the telecommunication companies are using our services, and the government as well. There are many, like Celcom, Maxis, DiGi, TM, FibreComm, RTM, Police, Jaring and among the big companies Petronas, Sapura, or Sarawak Energy.

Q: What are the conditions to use the services, such as interconnection fees?

A: It is based on leasing and rental. The more people use, the lower they need to pay.

Q: Sacofa has been granted the exclusive right to provide telecommunications infrastructure in Sarawak. Does this exclude other parties from venturing into the same business?

A: No, there are companies coming in such as Telecom Malaysia, Celcom, and others which are building their own fibre optic and microwave infrastructure. We are the only one designated by the government to own communication towers, but in the other sectors, everybody can come in and do business. They can, however, use our towers.

Q: Are you open for private investors or partnerships, for example from the GCC?

A: Maybe in the case of new services, for example data centers or call centers. These are the new areas we are looking into. We ourselves would like to meet foreign investors and see how we can develop these new services. We have the basic infrastructure, but at the top of that there are many services we could add. Our company is open as long it is a win-win-situation.

Q: What is the connectivity structure of Sarawak with the neighbouring countries?

A: We have been connected to Brunei from early on, and also to Peninsular Malaysia. We are also connected to Indonesia, but we are looking to improve this connection and work together with the Indonesian telecoms much closer. The licensing process in Indonesia is not easy, and we need their government’s support. But we see there is a potential to open up to Indonesia.

Q: What are Sacofa’s plans for 2012?

A: We are pursuing two areas: Firstly, to build more towers. Secondly, to connect 400 of our towers with fibre optic cables. This should be completed by the end of the year or by the half of next year at the latest, and we can offer it to all the telecoms. There is a hunger for bigger bandwidth, and fibre optics is the answer.

Q: How would you assess the broadband initiative of the Malaysian government? Is a 100 per cent nationwide penetration by 2020 feasible, including remote communities? Will people in the longhouses in the future be connected to the Internet?

A: Until 2020, we still have a few years to go. As of now, we have reached mobile coverage of 70 per cent in Sarawak. In urban areas, we will certainly reach 100 per cent by 2020, but in the rural areas I am not sure if we will be able to reach this goal. There will always be blind spots, and it is also a matter of costs, demand, and supply. I hope that the government will step in with the USP fund. If we had enough money, it won’t be a problem to cover 100 per cent of Sarawak in the next eight years. But from the commercial viewpoint, it is difficult. But 80 to 90 per cent penetration should be feasible.

Q: What is the value of a high Internet penetration to the economy?

A: I believe there is a direct correlation between Internet usage and national GDP. Just look at Korea, they have the most developed broadband infrastructure in Asia and their GDP growth was tremendous. They were very aggressive in this. Today, almost every Korean household has a high bandwidth connection even up to one gigabyte and we here are still talking about less than two megabyte. And we need to train our people to use the web, this is the key for a digital economy. Technology must be an enabler to lift Malaysia up. Then the companies will come in. But I don’t think we can do that in the next eight years, at least not for the rural areas.

Q: What is your personal message of Sacofa to our readers?

A: I hope that Sacofa will remain to be the main agency providing telecom infrastructure in Sarawak. So far we have achieved the government’s aspirations, but we need to do more to ensure the growth of the telecom sector. I also hope we can work together with investors and companies that are coming in to achieve the goals for 2020. If we reach a high internet penetration, we can also bring up the GDP and the economic status of the people in Sarawak. And I want to see the ICT sector growing. Without this, we would be lagging behind.

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Reading Time: 5 minutes

Sacofa’s Managing Director and CEO Dato Ir. Abg Jemat Abg Bujang

Sacofa defines itself as the technology and telecommunication flagship company in Sarawak. As a government-owned agency, Sacofa manages and facilitates telecommunication basic infrastructures on the concept of sharing. This includes high-speed internet access and mobile telephony networks. Inside Investor talked to Sacofa’s Managing Director and CEO Dato Ir. Abg Jemat Abg Bujang about the objectives of the company.

Reading Time: 5 minutes

Sacofa’s Managing Director and CEO Dato Ir. Abg Jemat Abg Bujang

Sacofa defines itself as the technology and telecommunication flagship company in Sarawak. As a government-owned agency, Sacofa manages and facilitates telecommunication basic infrastructures on the concept of sharing. This includes high-speed internet access and mobile telephony networks. Inside Investor talked to Sacofa’s Managing Director and CEO Dato Ir. Abg Jemat Abg Bujang about the objectives of the company.

Q: What is the current coverage of mobile telephony in Sarawak?

A: At the moment, all the urban areas are covered with cellular and wireless connections, but in the rural areas it is only about 80 per cent. We are constantly building new lines and towers, but I think we need more towers especially in the rural areas. Communities are quite scattered in Sarawak, and it is a big challenge to reach all the people in rural areas via the cellular network.

Q: What is your roadmap to cover all the people in Sarawak?

A: Currently, we have about 700 towers available to connect people with mobile and wireless services, but we need to at least double this number to cover the rural areas.

Q: Where are the investments coming from?

A: There is a government allocation of funds under the Universal Service Provider Fund. Every telecommunication license holder has to contribute to this fund. We are using this fund to expand the rural network coverage. I believe, over the next five years, more funds will be allocated to Sarawak as we have a lower coverage than the rest of Malaysia.

Q: What about the internet penetration?

A: It’s at about 47 per cent, still very low, so a lot more funds have to be pumped to Sarawak to tighten the network.

Q: There have been talks about a possible IPO of Sacofa, are there any news on this?

A: We have been thinking about it, but there is actually no plan on it yet. We are committed to the people of Sarawak, and if we would be publically listed, it would be more difficult to implement what the government wants. Of course we could use the money from an IPO, but currently there are no steps being taken in that direction.

Q: Which are the companies that are using the shared services?

A: Almost all of the telecommunication companies are using our services, and the government as well. There are many, like Celcom, Maxis, DiGi, TM, FibreComm, RTM, Police, Jaring and among the big companies Petronas, Sapura, or Sarawak Energy.

Q: What are the conditions to use the services, such as interconnection fees?

A: It is based on leasing and rental. The more people use, the lower they need to pay.

Q: Sacofa has been granted the exclusive right to provide telecommunications infrastructure in Sarawak. Does this exclude other parties from venturing into the same business?

A: No, there are companies coming in such as Telecom Malaysia, Celcom, and others which are building their own fibre optic and microwave infrastructure. We are the only one designated by the government to own communication towers, but in the other sectors, everybody can come in and do business. They can, however, use our towers.

Q: Are you open for private investors or partnerships, for example from the GCC?

A: Maybe in the case of new services, for example data centers or call centers. These are the new areas we are looking into. We ourselves would like to meet foreign investors and see how we can develop these new services. We have the basic infrastructure, but at the top of that there are many services we could add. Our company is open as long it is a win-win-situation.

Q: What is the connectivity structure of Sarawak with the neighbouring countries?

A: We have been connected to Brunei from early on, and also to Peninsular Malaysia. We are also connected to Indonesia, but we are looking to improve this connection and work together with the Indonesian telecoms much closer. The licensing process in Indonesia is not easy, and we need their government’s support. But we see there is a potential to open up to Indonesia.

Q: What are Sacofa’s plans for 2012?

A: We are pursuing two areas: Firstly, to build more towers. Secondly, to connect 400 of our towers with fibre optic cables. This should be completed by the end of the year or by the half of next year at the latest, and we can offer it to all the telecoms. There is a hunger for bigger bandwidth, and fibre optics is the answer.

Q: How would you assess the broadband initiative of the Malaysian government? Is a 100 per cent nationwide penetration by 2020 feasible, including remote communities? Will people in the longhouses in the future be connected to the Internet?

A: Until 2020, we still have a few years to go. As of now, we have reached mobile coverage of 70 per cent in Sarawak. In urban areas, we will certainly reach 100 per cent by 2020, but in the rural areas I am not sure if we will be able to reach this goal. There will always be blind spots, and it is also a matter of costs, demand, and supply. I hope that the government will step in with the USP fund. If we had enough money, it won’t be a problem to cover 100 per cent of Sarawak in the next eight years. But from the commercial viewpoint, it is difficult. But 80 to 90 per cent penetration should be feasible.

Q: What is the value of a high Internet penetration to the economy?

A: I believe there is a direct correlation between Internet usage and national GDP. Just look at Korea, they have the most developed broadband infrastructure in Asia and their GDP growth was tremendous. They were very aggressive in this. Today, almost every Korean household has a high bandwidth connection even up to one gigabyte and we here are still talking about less than two megabyte. And we need to train our people to use the web, this is the key for a digital economy. Technology must be an enabler to lift Malaysia up. Then the companies will come in. But I don’t think we can do that in the next eight years, at least not for the rural areas.

Q: What is your personal message of Sacofa to our readers?

A: I hope that Sacofa will remain to be the main agency providing telecom infrastructure in Sarawak. So far we have achieved the government’s aspirations, but we need to do more to ensure the growth of the telecom sector. I also hope we can work together with investors and companies that are coming in to achieve the goals for 2020. If we reach a high internet penetration, we can also bring up the GDP and the economic status of the people in Sarawak. And I want to see the ICT sector growing. Without this, we would be lagging behind.

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