KUALA LUMPUR, Feb 19 ― The Malaysian government will spend up to RM56 billion on infrastructure for faster and wider internet connectivity under a 10-year plan aimed at developing the country’s digital economy, Prime Minister Tan Sri Muhyiddin Yassin said today.

Nearly half of the budget will go into the National Digital Connectivity (Jendela) programme, a five-year plan to expand fixed fibre optic internet coverage to nine million premises by 2025 from 7.5 million in 2022.

This infrastructure will be crucial if the country wants to realise its 5G ambition. Muhyiddin said private telecommunication companies will invest over a billion ringgit more to connect Jendela to undersea cables by 2023, and RM15 billion more into expanding 5G connectivity nationwide.

A government special purpose vehicle will oversee the 5G infrastructure rollout, with the cost to be borne by both the public and private sector.  

Muhyiddin said cost-sharing would make the technology cheaper, and he pledged that all licenced telecommunications companies would have equal access to the infrastructure. 

Putrajaya has set a 10-year goal to achieve nationwide 5G coverage but Muhyiddin said the effort will start producing results within 2020.

"Hence the people can begin to enjoy the benefits of 5G technology in stages by year end,” the prime minister said.

"With this, Malaysia will be among the first few countries in the region to build a 5G ecosystem through the internet and cloud services in real time, enabling information to be shared instantly.”

Muhyiddin has pledged another RM12 to RM15 billion investment into cloud computing service providers for the next five years, with Google, Microsoft, Amazon and Telekom Malaysia (TM) already given conditional contracts to develop and manage hyperscale data centres and hybrid cloud services here.

These projects will be the main drivers of MyDigital and form the core thrust of a federal digital economy blueprint that sets to make Malaysia a key e-commerce player.

Under the plan, Putrajaya expects the sector to contribute up to a fourth of Malaysia’s GDP by 2025 and create half a million jobs. The initiative is also meant to increase micro businesses’ presence in e-commerce and grow more local startups firms. 

Muhyiddin said the initiative is expected to draw up to RM70 billion in domestic and foreign investment and drive productivity up by 30 per cent.

"MyDigital is an initiative intended to empower every citizen, from Perlis to Sabah, so that they can improve their lives,” the prime minister said.

"Among others, it aims to increase digital literacy, create more high-income jobs, make banking and financial management easier, enable virtual learning to our children and extend medical services to remote areas,” he added.

TM, in an immediate response to the announcement, called the initiative a "holistic approach” that would accelerate the country’s ambition to become a technologically advanced economy.

"We would like to congratulate the Government on the comprehensive MyDIGITAL – the Malaysia Digital Economy Blueprint to accelerate the nation’s digital enablers towards a technologically-advanced economy by 2030,” it said in a statement.

"It is a holistic approach encompassing digital connectivity (fibre and 5G), digital infrastructure (cloud and cybersecurity) as well as digital skill sets and talents, towards making life and business easier for Malaysians as a connected nation.”

A McKinsey Global Institute’s (MGI) estimate in 2019 put Asia’s digital economy at more than 50 per cent of global GDP by 2040, and would account for 40 per cent of consumption.

The South-east Asian digital economy alone was valued at more than RM400 billion in 2019, while Malaysia’s e-commerce was valued at RM16 billion the same year.