MALAYSIA is set to become a sub-regional interconnectivity hub for Southeast Asia due to its terrestrial connectivity to the rest of the region and beyond, complementing the major content hub of Singapore by providing regional interconnection for growing local needs.
In a whitepaper by DE-CIX titled ‘New interconnection markets in Southeast Asia’, telecommunications analyst TeleGeography highlights that an excessive dependence on Singapore as the regional and global hub, resulting to an increased demand for more widely distributed carrier and data centre neutral interconnection infrastructure.
“Singapore is a stable economy and a great market. But we see so many network operators wondering about the cost of deploying there, and now we have policy issues related to data centre development that are hamstringing development,” said TeleGeography senior manager Jonathan Hjembo in an exclusive email interview with FocusM.
“We have to go deeper into sub-regions, rather than looking for alternatives for traditional hubs,” he added.
Meanwhile, DE-CIX International CEO Ivo Ivanov believes that the shift to Malaysia will not reduce the need for strong hubs like Singapore, but rather supplement that need with greater edge peering, networking, and computing resources.
“We say that Malaysia will be good for two reasons. For one, the concentration of sea cables and proximity to terrestrial paths to Singapore, and second, it is a fast-growing economy. (That allows for) quality Internet exchanges which will help domestically to create a lot advantage for businesses and the entire digital economy,” he told FocusM.
The findings of the white paper demonstrate the rising demand for network interconnection localisation on a sub-regional level. The key reasons for this expansion include:
- Network concentration in one city is not ideal to ensure reliable service in volatile situations
- The high colocation costs in Singapore (25% pricier than New York’s average price per kilowatt)
- Operational uncertainty in the other regional hub market, Hong Kong, due to political instability
- Nascent markets in Southeast Asia have rapidly growing demand for international bandwidth, saturated telecommunications markets, and an appetite for local interconnection.
Additionally, DE-CIX Malaysia and Singapore board of management Weng Yew Wong noted that the white paper reveals that the Southeast Asian markets are already highly interconnected and possess regional self-reliance.
“In Malaysia, we definitely have the strengths in terms of our proximity to the hub and the variety of the connectivity that we have in the country. However, our population size is not as big as some of the neighbouring countries. When placing their content, players are likely to decide that Malaysia is a good transport hub, but perhaps not that it is the best location to place content. But this may change over time as more cloud players come into the region.” Weng said.
“I would say that Malaysia stands a good chance to compete in the region because of our proximity to the Singapore hub and ease of connectivity in the country,” he added.
Weng also noted that over time, Malaysian operators have developed a lot of strategies to deal with this situation, and the dependence on Singapore has been decreasing.
“With the DE-CIX Asia distributed interconnection platform connecting IXs in the region, we are aiming to bring in the lowest latency connectivity between the eyeballs and the content players,” he told FocusM. – Nov 20, 2020
