The key role that Sarawak’s major infrastructure projects will play in driving forward the Malaysian state’s economic development is explored in a landmark report just published by the Oxford Business Group (OBG).

The Report: Sarawak 2011 provides incisive analysis of the state’s bid to build on the economic growth achieved in 2010 by capitalising on its strategic, geographical location and underutilised land.

It also offers wide-ranging analysis of the expansion expected to take place in the state’s heavy industry and financial services sectors, which are likely to be pivotal in reshaping Sarawak’s economy.

OBG’s second report on the state’s economic development was launched early October in Kuching, in the presence of the Chief Minister of Sarawak Pehin Sri Haji Abdul Taib Mahmud.

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Over the first three quarters of the year, the Volkswagen Passenger Cars brand has continued to grow deliveries, handing over 3.81 (January – September 2010: 3.39; +12.3%) million vehicles to customers.  For the month of September, the brand reported 472,100 (September 2010: 415,100; +13.7%) deliveries to customers.

“The positive development in deliveries by the Volkswagen Brand over the first nine months has been very gratifying,” says Christian Klingler, Board Member for Sales and Marketing for the Volkswagen Group and the Volkswagen Passenger Cars brand.

From January to September 2011, Volkswagen Passenger Cars recorded growth in almost all markets. In the Asia/Pacific region, the brand sold 1.44 million vehicles for the said period. This figure included 1.29 million units delivered in China, the largest single market. Deliveries in North America also developed very positively.

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Going back to the 1980’s and 90’s, Malaysia’s timber industry was one of the country’s thriving industries. At one point, it contributed more than 12% of Malaysia’s total export earnings.

The earnings has since dwindled down as the timber industry faced strong allegations and misconceptions regarding its practices globally, especially with the issue of deforestation becoming a topic of choice of late.

Many wonder if an industry profits from timber or wood products, can it then be a sustainable one. After all, the main focal activity is the act of cutting down trees from our lush tropical rainforests.

Speaking to Cheah Kam Huan, Chief Executive Office of the Malaysian Timber Council, Business Today discovers that many perceive the timber industry to be one that clears out the forests, when in fact; there are many protocols and best practices that are put into every step of the way.

Governing Council

The Malaysian Timber Council, or better known as MTC, is tasked by the government to ease campaigns against tropical timber and deforestation, as well as protect the rich biodiversity we have in our tropical rainforests.

“MTC was launched in 1992. Come January next year, we are going to be celebrating our 20th anniversary. We were mandated by the government to help the timber industry in Malaysia to tackle the negative conceptions we received from Western countries mostly,” says Cheah.

“The forest sector in Malaysia was once a very important sector with more than 12% total export earnings in the country. Now it is only contributing about 3%.”

Since then, the roles and responsibilities of MTC have evolved into helping the industry to supplement its raw material supply, in addition to expanding and developing new technologies for the industry.

MTC’s role also includes green advocacy, where the council addresses and tries to curb environmental concerns in the timber industry, such as illegal logging. Cheah adds: “We are also responsible in presenting a proper picture and figures to ensure little to no misconceptions arise (about the local timber industry).”

Trends of the Trade

Comparing the industry now and during its prime 1990’s, the industry has certainly shrunk in terms of volume produced in Malaysia. “Back then, we produced about 40 million cubic metres of timber a year. Now we only produce more or less 20 million cubic metres a year,” explains Cheah.

This is certainly a tangible effort taken by the Malaysian government to cut down log production in the country, as well as a testament to its acknowledgement of the importance of our natural forests.

Cheah also mentions that the production rate every year has seen a reduction. So, who knows we might see less dependency in our timber industry in the coming years.

Rather than to encroach the forest reserves, he explains that more production of logs is coming from tree plantations for industrial trees. “This is a trend we see happening globally. Malaysia is going towards this as well, since we cannot overly depend solely on our tropical forest,” adds Cheah.

Under the Plantation Forestry Programme announced by the government six years ago, there are plantations all over Malaysia, a total of 375,000 hectares, with fast growing tree species, such as rubber and teak, for commercial purposes.

In addition to contributing to the economy, the programme is helping those who are interested in running such tree plantation assistance through soft loans. The programme is set to run until the year 2020.

Says Cheah: “Investors will get a designated plot of land from their respective state governments to start the plantation. These lands are usually abandoned, degraded or idle. Of course, they are of agricultural status.”

Counter-Productive Issues

In recent news, Australia has expressed its interest in prohibiting the import and placement of illegal timber in the country. Other countries, like Japan and New Zealand, are also leaning towards this.

While Cheah agrees that there is a need for some form of regulations and best practices to be adhered to in the industry, he firmly believes that if export regulations imposed are too strict, many timber producing countries may not be able to comply.

The question remains on what the governing bodies consider illegal. Thus far, Malaysia is able to comply with these export regulations.

Stringent Best Practices

The timber industry itself has also evolved over the years, with policies leading towards sustainability. First up, the government enacted the National Forestry Act in 1984. This was followed by an amendment close to 10 years later. The act addresses the different categories of illegal logging, with the punishments becoming increasingly more severe.

For instance, the fine for unlicensed removal of forest produce from permanent reserved forest used to be RM10,000 or imprisonment not more than three years or both. Now, it is RM500,000 or imprisonment not less than a year but not more than 20 years.

For every “harvest” period, there will be an annual coupe determined. Interested parties would have to tender and bid for the contract to log at the designated areas. Even minute details including cutting unmarked trees or not cutting marked trees can land you with a large fine.

It was common to hear about illegal logging in Malaysia back then. “You don’t hear it as much nowadays because the industry is well-regulated. Usually when it happens, they are not from Malaysia. Villagers who are staying in the surrounding areas are also more aware and keen on reporting such incidences,” concludes Cheah.

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Acting on the advice of the Fire and Rescue Department Malaysia (FRDM) and in the interest of public safety, the management of Empire Shopping Gallery has taken the decision to halt all operations following the gas explosion at its premises until further notice. Investigations are currently on-going with FRDM’s Forensics expected to release the preliminary report soon.

“We have taken the decision to halt operations as safety is our highest priority. We assure all our tenants that this decision has been made after carefully considering all factors and advise from the authorities. Empire Shopping Gallery prides itself on providing a quality retail experience and we will do whatever is necessary under this circumstance to facilitate that,” says May Woo, General Manager, Empire Shopping Gallery.

May further adds that tight security has been implemented around the premises and urged all affected parties to contact the hotline should they require further information.

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BMW Group recently reported its record performances globally, regionally and in Malaysia for the first eight months of 2011. The results were announced by Guenther Seemann, Regional Director for BMW APAC and South Africa, and Geoffrey Briscoe, Managing Director for BMW Group Malaysia.

So far in 2011, the BMW Group has sold 1,073,363 vehicles worldwide in the first eight months of the year, representing an increase of 16.8% over the same period last year and reinforcing BMW’s position as the world’s largest premium automobile group. Similarly, the APAC region reflected this growth, making the region the fastest growing BMW market globally and the second largest market after Europe.

Seemann shares: “This July, the BMW Group announced that the first half of 2011 was the most profitable six month period in the history of the brand, with our Earnings before Income Tax (EBIT) standing at Euro 4.8 billion, an increase of almost 220% from 2010’s figures. This year is looking to be yet another historic milestone for us, where we manage to meet and exceed the benchmarks in all areas of our business.”

Closer to home, BMW Group Malaysia also reflects the group’s dynamic performances, with a total of 3,711 BMW (including Motorrad) and MINI vehicles sold from January to August 2011, representing a 28% growth over the 2,893 units sold in the same period last year, which in itself was already a record-breaking year for BMW Malaysia.

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Oman Air’s pioneering inflight mobile phone and Wi-Fi connectivity have been recognised with the award of Best In-flight Connectivity and Communications at the Passenger Choice Awards.

The awards highlights the aviation industry’s finest innovation, products and services and is organised by APEX, the Airline Passenger Experience Association. Each award is determined solely by the votes of the travelling public and voting is tracked by the Neilson Company.

The award was accepted by Oman Air’s Abdulaziz Al Raisi, Chief Officer, Management Affairs, and Linda Celestino, General Manager Onboard Services, at a ceremony held in Seattle.

Abdulaziz says: “Oman Air is committed to being at the forefront of technological innovation within the civil aviation industry and we are delighted that our pioneering in-flight mobile phone and Wi-Fi connectivity has been recognised with this prestigious award. The Passenger Choice Awards are especially notable because they are voted for by the judges whose decisions matter most, air travellers.”

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Mubadala Oil & Gas recently unveiled its first local community project in Malaysia in partnership with the MyKasih Foundation. Mubadala Oil & Gas committed RM150,000 to support 100 low income families in Miri through the established MyKasih “Love my Neighbourhood” food aid and training programme.

“By teaming up with the well-respected national non-profit organisation, MyKasih Foundation, our programme not only provides food aid, it also strives to transform the families through skills training and education covering financial literacy, health awareness and life skills for teenagers. Programmes like this are demonstration of our commitment to engage with communities close to our operations and to play our part in contributing to local development,” says Barry O’Donnell, Regional Vice President, Mubadala Oil & Gas.

The funds will reach the family members directly not in cash but in the form of essential food supplies they can purchase from Giant Supermarket at Bintang MegaMall, supported by leading-edge technology via MyKad.  Leveraging the use of MyKad allows MyKasih to target welfare aid to the right person, enabling the distribution of welfare aid in an efficient, transparent and secure way.

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To celebrate the launch of Tune Hotels’ second UK property, Tune Hotel Liverpool Street, consumers have the chance to enjoy a night’s stay at just 2p. Opening on 4 January 2012, Tune Hotel Liverpool Street is located on Folgate Street; just a few moments walk from the City of London to the south, the cosmopolitan areas of Spitalfields to the east and Shoreditch to the north. The hotel has excellent transport links with Liverpool Street Station less than 500 metres away. Housing 183 en-suite bedrooms, the hotel will share Tune Hotel Westminster’s core proposition of great value and savings. Mark Lankester, CEO of the Tune Hotel Group, comments: “Following the success of our Westminster hotel, we’re thrilled to be launching our second UK property. We want to share our excitement with our customers, which is why we’re giving them a chance to stay with us for just 2p. “London is a diverse city and a fantastic place to enjoy a holiday or do business. The opening of the Liverpool Street property will provide consumers with a great night’s sleep that doesn’t break the bank.”

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The Samsung GALAXY S II achieving 10 million global channel sales, doubling from five million in just eight weeks, leaves the Samsung Electronics Co., Ltd in cloud nine.

Samsung’s flagship smartphone device, the GALAXY S II is a beautifully thin and lightweight dual-core smartphone that combines an unmatched Super AMOLED Plus viewing experience with powerful performance, all on Android, the world’s fastest-growing mobile operating system. This smartphone also includes Samsung’s four content and entertainment hubs, seamlessly integrated to provide instant access to music, games, e-reading and social networking services.

“Since its launch in late April 2011, the GALAXY S II has seen continued sales success, demonstrating Samsung’s industry-leading capabilities in – and commitment to – the smartphone market” says JK Shin, President and Head of Samsung’s Mobile Communications Business.

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A positive change is in the air come November, as YTL Communications promises no plans, device independence & super service.

We are not a Telco (telecommunications) company, we are an Internet company. These are the proud words by Wing K Lee, Chief Executive Officer of YTL Communications Sdn Bhd (YTL Comms).

In fact, Executive Director cum Deputy CEO of YTL Comms Jacob Yeoh Keong Yeow attests to the same fact, as they set the paradigm RIGHT on what end users can expect come November. The entire pack in YTL Comms sings this same tune with great conviction.

The eyes of the nation, as well as the telco industry, are all on this particular entrant into the commercial space of broadband. In fact, for the YTL Group, this is its very first entry to the actual consumer space. However to the group’s credit, all projects it has undertaken have involved being a positive change to the community.

Sharing an impressive track record of being a nation builder, the YTL Group has, in its course of operations, made low-cost housing, be an independent power producer (IPP), built the ERL high speed rail from KLIA to the city centre, drove carbon credit investments, nurturing performing arts with the KL Performing Arts Centre (KLPAC), as well as created the Sentul Park project that can be likened to Central Park of New York or Hyde Park of London. The list is endless.

With such an impressive array of community-centred endeavours, YTL Comms foray into the commercial space is something to watch out for. But waiting for three solid years was something many – ministry, industry and consumers – didn’t bank on. That we shall examine later.

True to its community changing efforts, Yeoh shares: “All in all, we do like project where we involve giving back to the community and I think this is the first time we actually go down to the consumer. We are actually offering Malaysia’s fastest mobile internet with voice to every consumer nationwide.

“When we were given the spectrum of 2.3GHz for WiMAX, we learnt from our partners like ClearWire. We have a history of doing great projects, not just average ones. We did our due diligence and felt that this is a great technology that can bring down the barrier for people who want to get on the internet but can’t afford it. That’s how we kind of got roped in.”

In fact, he goes on to emphasise that come November, YTL Comms will be delivering the first converged (and fastest) 4G mobile internet service in the world.

“You’ll have access to the internet, voice services, data and video services – all in one. It’s important for us to bring value to our customers. When we launch (in November) we are going to be very competitive with other providers and lower down entry for consumers to get onto the internet space.

“In terms of what we want to do for the community as a bigger vision is to bring positive change in Malaysia,” says Yeoh.

Setting the stage

Back to the issue at hand, YTL insists it is not offering its services to be just another telco business.

Laying it all out, Wing sets the paradigm, or mindset right, with going into the broadband business. “We talked about the group having two choices several years ago, when it was given the 4G (WiMAX) license by MCMC. We can either take the license and build a brand new business – that takes much more work, much more involvement and as they say ‘the path less travelled’ – or use the group’s financial resource to buy an existing carrier.

“Therein lies the fundamental point, which is the key paradigm. The group and the board were quite convinced that the existing telco paradigm is not going to a path that will lead to a long term sustainable success. Only when we take the path less travelled, which is building our own network and company, only then can we have the right paradigm.”

So what is the paradigm? Wing believes the paradigm here is basically the key prerogatives of success. With the telco paradigm, your success would be a telco-like economic model.

“If you build your brand new company using an internet-type paradigm, then your key criteria for success from a customer experience standpoint, from a financial model standpoint would adhere to the internet model. Now which model will be sustainable in the long-term – the Internet model or telco model? I think you guys know the answer.”

Thus we see the birth of YTL Comms, as an Internet company, with a whopping investment of US$815 million and a long-term lifespan through its Internet-model.

Not one to attack the current telco business model, Wing puts it simply that it is not sustainable in the long run, with some facts. One, current trend lines dictate that demand for data is insatiable and more and more people derive this data from the Net, while voice traffic is plateauing. Two, the economics of the telco business is based on the economics of constraints, while the Internet works based on the concept of abundance.

“When you build your business space based on the economics of abundance, then you focus less on how do you hold things back, which is what most telcos do by charging you a big block in the service plan just to gain entry into that space.”

Also the fact that the telco cost structure is very high due to it using proprietary technology, which is very expensive, doesn’t bode well with Wing. If you look at the Internet world, you don’t need those proprietary technologies.

So does that mean YTL Comms knows a secret the others don’t.? Wing thinks not: “Would the other telcos like to embrace IP type infrastructure? Of course. If you can, it’s always fantastic. But they have already invested all these years in all such proprietary switches. They are on a track that they can’t get off.”

In unison with Wing is Yeoh, who says: “We’re not bound by legacy (like the current telco players). If we wanted to get into the telecommunications industry, we would have just bought out an existing player. We have the opportunity to start from scratch and learn from best practises from the competitor information that we have.

“For us, it is a fresh slate …. We’re in a stage where everything is going digital. There’s going to be a digitisation of the Internet as we’re right smack in the middle where people are moving up to the IP based world. People now want flat IP nationwide infrastructure for data. In actual fact, our base stations carry data efficiently. Fundamentally, it is a different kind of architecture – telco is a switch based network, unlike ours, which is internet packet based. In that aspect, we’re able to roll out 4G, voice and data in a larger scale.”

Why the delay then?

The much debated and discussed launch date for YTL Comms’ service has left many wondering and naysayers predict the November date as not likely to happen. So what do the folks at YTL Comms has to say about that.

“The launch date is finalised. I don’t think we’re going to push it to a later date,” shares Yeoh.

Adds Wing: “We started (trial runs) in July with real people. We have different parts of the country already lit up with WiMAX – KL, Penang, and JB. We just need to make sure we fine tune the network before we go commercial service. Of course we want to level up the user experience. We need to shake out our network, business process, devices, applications (everything) to ensure everyone’s ready.

“We want all these pieces to converge to give a successful user experience. At the end of the day, the moment of truth is the customer’s interest to do business with us. That’s the ultimate moment of truth.”

This brings us back to the point of how the company decided to go the “Christmas light” strategy in rolling out its service instead of a staggered one adopted by its fellow competitors.

Yeoh clarifies: “If you want to sell a voice service, you can’t have it spotted – consumers will experience things like drop calls or lack of coverage outside of KL or major cities. There’s where we are different from other WiMAX providers. We want to develop a good consumer experience from the onset.

“At the end of the day, at YTL we have enough resource to roll our service out in one go. That’s why we haven’t said too much to the media because we want to give consumers the best possible experience before we launch the service.”

Sharing this same sentiment, Wing says: “Existing WiMAX operators will tell you, “Come to my network. By the way, please stay within Kuala Lumpur.” Or “Ma’am, come to our network, but please stay in Klang Valley.” I think it’s safe to say that we are free people. We wouldn’t want to live our lives based on a map. You don’t go on your weekend trip to a place that you know for a fact has a carrier’s coverage. You can’t spend your life based on people’s coverage.

“Mobile technology should give you more freedom fundamentally. Mobility means freedom. You can’t launch a mobile network and not offer people the freedom. That is the most fundamental reason why we want to offer 65% coverage as a starting point. That’s the only starting point and I think it’s important.”

So YTL Comms has been on the receiving end of much flak, and Yeoh feels that their silence is founded on the fact that this has never been done before in the world.

“There’s a lot of hard work on our part but we don’t like to go out and tell people about it or make noise about how brave we are. We want to focus on the hard work before we come out. That’s why we’ve been very quiet. I think our services will speak for itself.

“When we launch, maybe you will start to understand because some of the stuff are still under wraps and hasn’t been announced yet. People will feel compelled to get the service because it brings a lot of value at the end of the day.”

Un-clouding the potential

Holding on to the belief that an improvement in the Internet connectivity can improve a country’s GDP and herein lies YTL Comms’ business model.

Spotty Internet coverage and speed is what is holding the country back from a productivity standpoint. Shares Wing: “It’s not just about individuals. It’s not about the inconvenience of you not being able to check your email. It’s the inconvenience of a country not being able to get connect, stay connected, be productive and be competitive. That’s the problem.

“If the PM says he wants to improve the GDP, I can’t agree more. But we can’t increase GDP when people have spotty coverage. The World Bank released a report last June saying for every single country that has a 10% increase in Internet connectivity would see 0.3% increase in GDP. So can Malaysia improve its Internet connectivity by more than 10% from where we are today? I think we can.”

Putting its money where its word is, YTL believes the service it rolls out will put Malaysia on the map where communications is involved.

“(When we roll out) we will be the world’s first nationwide converged 4G network and that’s a big deal. It is something that doesn’t happen too often in Malaysia – to be a world class or world’s first wireless country. From where we are today to where we will be when we launch in November, we’ll leapfrog this country from the current number eight in South East Asia when it comes to mobile internet connectivity to the world’s foremost converged 4G nation.”

To further empower the nation with better internet connectivity, YTL Comms is also changing the elemental way in which data is consumed in the country, seeing as there is insatiable demand for internet connectivity here.

“When the average (Malaysian population) age is 26 and the internet connectivity is only at 30%, imagine the potential and demand for internet connectivity. The Internet affects all of us, in terms of how we live our lives – in the way we play, learn and work.

“We are taking this Internet mobile. All its goodness will come alive on our network because we have the 65% population coverage and growing beyond that, with three to five times higher speeds than anyone else in Malaysia. Internet comes to you in a hurry with YTL …. I’m not just talking about fun and games, I’m talking about helping kids to learn, helping the business man in Penang and JB be able to compete with their counterparts in Singapore and Korea – it gives people a level playing field,” explains Wing.

The distinguishing edge

Getting down to business, what makes YTL Comms any different from other telco operators in and outside the country?

Wing says: “For one, the company is self-funded and we need not explain ourselves to appeal to investors, unlike other folks out there. Also, of all the new entrants of this licensing model, YTL’s entry has the financial capability to invest at a massive scale.”

Another fact that will definitely leave many straighten up in the seats is the fact that the plans that YTL Comms proposes to have come launch date. Read this: there are NO PLANS.

This new service provider says its model is very simple and is based on how people have been paying for things all their lives – the Utility model.

Wing explains: “We give you a utility to you guide to the internet. The past 100 plus years, people have been paying for what they use. That’s how you do it with your gas, electricity, water and petrol. You pay for what you use. (Somewhere along the way) some carrier showed up, took a wrong turn and charged people for more than they use. I think we should go back to the natural way.

“We will have a clearly published unit cost. People will know for a fact how they will pay per use. We will speak the same language that they’re used to. When you make a phone call, you’ll pay how much you call for. If you text, we count your messages. It will be fantastic in value.”

This model then highlights the fact that people not being familiar with it and Wing answers: “We are just letting people go back to what they are used to all these years …. I think in this kind of model, the more you use the more you save. We don’t want to discourage them from using. We want to give them the best deal.”

To sweeten the deal even more is the way in which people can get onto the internet, whether for voice, data or video. With YTL Comms, you don’t need a SIM. All you need is a User ID/password, much like how one already accesses the internet. A user can use this to log onto multiple devices, and that includes a phone, which you will also get a phone number for. By the way, YTL Comms will be using the 018 prefix for its numbers.

Many might wonder how does one access the network to make calls without a SIM card. For this Wing beams away as he explains: “For all our customers, you’ll get an ID from us and with it comes a phone number. If someone were to call you at your 018 number, you can choose from the multiple devices you are logged in on to answer the call; whichever one is more convenient for you. For the first time the PC will ring using the 018 number!”

This also means new devices and putting in place a proper ecosystem to support the service provider’s business model, and that in itself explains the company’s significant investments.

Working with global leaders in their respective fields, YTL Comms roped in the best in the business to help it in this endeavour and they include Samsung (for its devices), Cisco Systems (IP networks and data centre), GCT (WiMAX chipset supplier), Intel (WiMAX enabled laptops and PCs), and IBM (Customer Care 2..0). So there will be new handsets, laptops and PCs that will bring the power of the internet plus voice (much like Skype but better) at value rates, coupled with tiny devices to enable already existing machines to the WiMAX network.

To go on to point out every investment the company has made with these partners will take the joy out of the internet, but one can be rest assured that their collective effort in making YTL Comms the fastest mobile internet service in Malaysia will not go unnoticed. In Wing’s words: “Come November, people will be free.”

However, one nagging question does persist – interconnectivity with other telco operators in the country. This is what Yeoh says: “Our system allows us to connect with the existing telcos. We have a 018 number and we’ve interconnected with Maxis and TM, but we’re still waiting on some other players to cooperate.”

On that note, Wing adds: “We regret that we couldn’t get much speed in that particular execution. I guarantee you that it is not due to us. Our guys are doing the best they can. We are on track to launch in November, but to get the full value of our service; we do need our colleagues in the industry to help us.”

With a promise to provide the fastest 4G mobile internet service in the country, as well as the best rates in the market with exciting new devices, YTL Comms may as well be all that it promises – a nation builder in the new internet age. Business Today is sure the people can expect a change in game plan by existing providers, or are they going to prove difficult in offering interconnectivity. Whatever the outcome, all users out there will be wise to hold on to their horses before changing their connectivity plans – be it phone or broadband – because YTL Comms is out to positively shake the market come November.

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