Telekom Malaysia Signs Deal for MSC Infrastructure

Posted on May 29, 1998 
Filed Under AsiaBizTech, Julian

By Julian Matthews

May 29, 1998 (KUALA LUMPUR) — Telekom Malaysia Bhd. signed a one billion ringgit (US$263 million) deal to provide state-of-the-art telecommunication infrastructure facilities for Putrajaya, the new federal government administrative center located within Malaysia’s Multimedia Super Corridor (MSC).

The telecom infrastructure will include fiber optic cables capable of supporting high bandwidth data transfers necessary for the MSC’s objective of becoming a global multimedia hub.

The MSC is a 750 square kilometer zone south of capital city Kuala Lumpur designated for the development and delivery of various multimedia products and services such as electronic government, smart card applications, telemedicine, distance learning, remote manufacturing and electronic commerce. It has been endorsed and supported by more than 136 companies, including Microsoft Corp., Intel Corp., Oracle Corp., Sun Microsystems Inc. and Motorola Inc.

Located 25 kilometers from Kuala Lumpur, Putrajaya covers an area of 4,581 hectares and is expected to support 250,000 residents.

It will have 76,000 government staff occupying 1.5 million square meters of floor space and will be the center of the government’s initiative to be completely paperless.

The office complex of the Prime Minister’s department and his official residence are among the first buildings slated to be ready by October.

Telekom Malaysia’s deal with project manager Putrajaya Corp. will be spread over five years, with the customer access network taking up 35 percent of the total cost involved. The remaining 65 percent will be used for switching and transmission systems, buildings, land, site preparation and other costs.

“The network, which is on par or even better than what is available today, is necessary to ensure that all systems and applications offered can support the transaction of data and information at high speeds,” said Telekom CEO Mohamed Said Mohamed Ali at the agreement signing.

The telecom network, the most comprehensive one its kind in the country, will be based on a three- tier structure. Tier One, which is the backbone network, will support between 2.5Gbps and 10Gbps, and Tier Two and Tier Three are customer access networks which will support 34Mbps to 622Mbps and 64kbps to 2Mbps, respectively.

The components of the telecom infrastructure include both copper and fiber optic cables, synchronous digital hierarchy (SDH) transmission system equipment, public switched telephone network (PSTN) and integrated service digital network (ISDN) switches, a trunk network system, asynchronous transfer mode (ATM) core and access switches as well as customer access networks.

The infrastructure will allow those within the community to enjoy services such as the Internet, smart schools, telemedicine, cable television, electronic commerce, electronic government and smartcard applications. Mohamed Said said the network will be linked both domestically and internationally and also to Telekom Malaysia’s nationwide broadband communications network, Corporate Information Super Highway or Coins.

Under the terms of the agreement, Telekom Malaysia, the country’s largest carrier, would have the rights to provide Putrajaya’s telecom services on an exclusive basis. To avoid infrastructure duplication, Telekom Malaysia will offer access to its Putrajaya infrastructure to other telecom operators to provide value- added services in the area.

Mohamed Said said that the first phase of the infrastructure network is already in progress.

“The backbone link is already 50 percent complete while the exchange will be completed by the end of July,” said Mohamed Said.

He said revenue from the operation should start to flow in by the third quarter of this year. “However, we expect to break even only after five years, depending on the progress of the development,” he said.

Telekom Malaysia also holds the exclusive rights for the provision of basic telecommunication facilities to the entire MSC area which involves an estimated investment of 5 billion ringgit (US$1.32 billion).

Designed as an open multimedia network, the MSC’s entire telecom infrastructure is due for completion by December 2020.

Published in Asia BizTech, May 29, 1998

by Julian Matthews, Asia BizTech Correspondent

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