Malaysian 2014 Budget ICT Comments

The Malaysian 2014 Budget offers just a few initiatives that are related to ICT:

1.) RM 1.8 billion for HSBB Phase 2

2.) Increase in broadband speed

According to MyIX, the speed announced for the suburban and rural areas are sufficient especially where the exposure to the Internet is new and will take time to see increase in usage. However, 10mbps for the urban areas is rather low as the internet consumption of our urban population is closer to a developed country whereby the minimum offering of 50mbps is common and 10mbps is no longer sufficient to meet the demands of the urbanites.

3.) Underwater cables for Sabah and Sarawak

According to MyIX, the plan for underwater cables for Sabah and Sarawak are seen as strategic direction for Malaysia and is commendable as this will help position Malaysia as a regional gateway to the world. In layman terms, it is like building a highway across the South China Sea to facilitate the increasing demand from East Malaysia.

4.) RM 1.6 billion for rural areas with the building of 1,000 transmission towers

5.) Entrepreneurship initiative - MAGIC and the development programmes by 1MET

6.) Single ICT Ministry.

Multimedia Development Corporation (MDeC) is now under Ministry of Communications and Multimedia.

7.) Implementation of GST at 6% is likely going to affect consumption of consumer IT products such as printers, tablets and etc.

By and large, buying frequency will reduce whilst consumers are likely going to focus on getting the value-for-money than going after trendy colourful choices; i.e buying the best of breeds than buying lower quality products.

I anticipate business creativity from the market where merchants may also want to offer GST rebates as incentives for consumers to win sales from competitors. This is highly anticipated to rip out from 2nd tier product vendors.

Without a doubt, the GST implementation will encourage upheaval adoptions of financial accounting & tax solutions, particularly those in the SMEs market segment - this whispers good news for local vendors and distributors who have been waiting for it for a while already, I hope they have got the solution ready long before.

The GST will also spice up the financial, accounting & tax services industry in the Malaysian scene. Likewise, the demand for personal financial advisory and consultancy is expected to surge.

Check out full commentaries from Pikom and MyIX.

Malaysian Budget 2014 Infographic.