Plans spell win-win situation, say IT industry players

Sunday September 9, 2007 ( The Star Online : TechCentral - Malaysia)

Plans spell win-win situation, say IT industry players

By STEVEN PATRICK

PETALING JAYA: Plans aimed at boosting broadband penetration in the country, as announced in the Budget, will be well received, according to information technology industry players.

They said that giving employers who provide staff with computers and broadband Internet facilities a tax deduction helped create a win-win situation.

"The employers will benefit from tax savings and there will be a strong spill-over effect," said David Wong, chairman of the Association of the Computer and Multimedia Industry of Malaysia (Pikom).

He said if employers bought PCs for their employees, they would bring the machines home.

"This will give their family members the opportunity to use these computers.

"We have a 26% household PC penetration (in a population of 27 million). This move would increase that rate," he said.

To further improve broadband penetration, the Government is providing companies that offer last-mile network facilities a significant incentive.

Such companies will get an investment allowance of 100% on capital expenditure incurred for broadband infrastructure, up to Dec 31, 2010, and should increase broadband penetration from 12% to 50% by then.

Datuk Badlisham Ghazali, chief executive officer of the Multimedia Development Corporation (MDeC), believes the move will alleviate the financial burdens of these service providers.

"They have to spend huge amounts of money initially and may only see profits after a few years," he said.

The Government has also allocated RM15mil to be spent on programmes to educate rural folk on the benefits of using information and communications technology (ICT).

In addition, telecommunications industry regulator, the Malaysian Communications and Multimedia Commission will spend RM45mil to provide Internet services to rural schools.

Companies undertaking ICT activities outside the country's cyber-cities and cyber-centres are also being encouraged to move into these areas.

The Government will discontinue its incentives for companies located outside these cyber-cities and cyber-centres.

Wong, however, said he was surprised by the announcement.

"This is a step backward. Incentives should be extended to companies outside cyber-cities and cyber-centres.

"But then again, there are many such cyber-centres coming up, so relocating shouldn't be a problem," he said.