Irrational Malaysians Prefer Slow Broadband?

This article first appeared on DigitalNewsAsia.

MALAYSIA’S newly minted Communications and Multimedia Minister, Dr Salleh Said Keruak, courted controversy recently by saying that Malaysian Internet users prefer the slower Streamyx broadband package that offers speeds of between 384Kbps and 1Mbps.

Many – including a former minister – have rubbished this assertion.

With all due respect, I think that our Minister has confused correlation with causation. No Malaysian would prefer to have a slower broadband package, if they had a choice.

The problem with the situation in Malaysia is that most people lack that choice.

The Minister himself points out that, in the end, it all boils down to affordability. This is completely accurate. If we had affordable high-speed broadband, nobody would rationally prefer the slower broadband packages.

In a recent study by the Internet Society and consulting firm TRPC on Unleashing the Potential of the Internet for Asean Economies published in 2015, they identified the Asean countries that do have affordable broadband access, taking into account GDP (gross domestic product) and purchasing power parity: Singapore and Thailand only.

The same study shows that these countries have average broadband speeds that are higher than the Asean average of about 15Mbps.

Malaysia’s average broadband speed of about 5.9Mbps is well below the Asean average. This is just plain embarrassing for the home of the Multimedia Super Corridor (MSC Malaysia).

We are now lagging behind many of our Asean neighbours and this may have a detrimental effect on our already suffering economy.

Another study by Ericsson, Arthur D. Little and Chalmers University in 2011 has quantified the impact of broadband speeds on national GDP. It claims that a simple doubling of broadband speeds increases GDP by 0.3%, while additional doublings can yield even more growth – for example, quadrupling of speeds increases GDP by 0.6%.

Read the other way, this means that by preferring to have slower broadband speeds, Malaysians are also choosing to reduce our GDP by a significant amount.

To put things into perspective, according to the World Bank, Malaysia’s GDP was US$326.9 billion in 2014. So ‘halving’ our bandwidth decreases our GDP by more than RM4.34 billion (US$980 million) a year.

Now, chew on that number for a bit and consider why our Government is not too concerned with increasing our broadband speeds.

Sure, some may argue that we do not need to have super-duper high-speed broadband in this country. Some even suggested that the demand for high speeds in Malaysia is purely driven by file-sharing piracy.

But the fact of the matter is that higher bandwidth means more modern services can be supplied to every home.

The same study by Ericsson claims that growth stems from a combination of direct, indirect, and induced effects. The induced effect, which includes the creation of new services and businesses, is the most sustainable dimension and could represent as much as one-third of GDP growth.

Everyone already knows that the future of computing lies in the ephemeral ‘cloud.’ This means that we will need high bandwidth for everything, since all our data and our everyday lives are going to be stored and processed on the Internet.

There is no escaping this new paradigm of computing as those who have no knowledge of a world without the Internet embrace this.

Personally, I don’t like to speculate on what people are going to do with their high-speed broadband when it arrives in their homes. I believe that Malaysians are a creative and entrepreneurial bunch. Once there is abundant bandwidth, I can guarantee you that someone will find a way to profit by using it for something other than piracy or porn.

Of course, broadband speeds are not the magic doorway to a high-income economy, but it sure is a step in the right direction.

Furthermore, a recent report from the Human Rights Council of the United Nations has declared that access to the Internet is a basic human right. The same report states that Internet access facilitates economic development and enables individuals to enjoy a range of basic human rights, such as freedom of opinion or speech.

In fact, in some parts of the world, broadband rights are already codified into local law. While none of our Asean neighbours have adopted such lofty ideals, we can all immediately appreciate how faster Internet access provides more opportunities for people to better their lives.

Even the most authoritarian governments understand this.

In the case of broadband speeds, more is definitely better. Higher speeds allow people to communicate better, by using video-conferencing instead of mere voice calls. It also allows people to work from home as effectively as they work in the office, which would improve family values.

And it would also enable broad deployments of tele-medicine, which could save countless lives, especially in the interior and remote areas.

To suggest that Malaysians would actually prefer to subscribe to slower broadband speeds is plain irrational and I refuse to believe that Malaysians are irrational people.

Published by

Shawn Tan

Chip Doctor, Chartered Engineer, Entrepreneur, Law Graduate.

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