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Malaysia Bets On MSC For Beyond 2000 Products

April 20, 1999, Kuala Lumpur -- Malaysia's high-tech dreams were severely tested in the last year when the government grappled with a political and financial crisis that spooked investors and threatened to undermine its Multimedia Super Corridor project.

The government maintains, despite major delays, that the project is still on track. One of the primary aims of the project is for companies within the corridor to build products and services for the new millennium.

Already several smaller companies linked to the project have begun to show promise.

Local smartcard players TL Technology Research (M) Sdn Bhd and Iris Technologies (M) Sdn Bhd are developing the "e-pass", an integrated multi-function smartcard touted as a "wallet PC".

Designed by European scientist Hartmut Hennige, the e-pass is small enough to fit into a wallet but combines the functions of a credit card, cash card, membership card, access control card, passport, medical and personal data card, and transport token card.

The e-pass is operated with touch-sensitive display screens which will show text or pictures, for example, of the holder's signature or photograph.

It will be powered by a polymer-based battery which will be rechargeable, when required, during a transaction process.

TL Technology Research director Chas Yap says the e-pass card will be employ Ferroelectric Random Access Memory (FRAM) technology, which are high performance, low power semiconductors that retain data even after power has been lost or removed. The technology is solely licensed by US-based Ramtron International Corp.

Hennige is the consultant to the project, and heads London-based E-pass International Ltd which will receive a percentage of all e-pass license fees and royalty for each card made.

Yap says a pilot project for the e-pass is expected to roll-out by end of 1999 involving about 200,000 users in northern United Kingdom.

TL Technology Research and Iris Technologies are associated companies involved in the manufacture of contact and contactless smartcards for various applications including passports, national identity cards, electronic visas, driving licenses, banking documents, airport baggage handling, and building access.

Yap says Malaysia can become a leading manufacturer, developer and exporter of smartcard technology, because smartcards are earmarked as a flagship application of the MSC project. The government espouses a single multi-purpose card for all its citizens.

He says that the single "supercard" per person is likely to materialize in the next century.

"Malaysia is expected to begin migrating to one card from its current two-card approach - one for government applications, and another for commercial payment use - by the year 2002 or 2003," he said.

Yap also believes that as the mobile phone matures into an integrated device for all forms of communications, e-purse applications will also be incorporated into it.

He also envisages chips will be embedded in a variety of documents, not just smartcards, and will have various biometrics verification such as fingerprinting, palm printing, and voice-recognition.

He adds that smartcard developers are also likely to merge their disparate technologies, or open their architecture for third-party platform integration.

Yap envisions his company moving up from smartcards to portable, wearable computers by 2005.

In the software area, the Internet is likely to provide the impetus for a variety of new products and services, says Darryl Carlton, CEO of BizTone Inc, another MSC-status company.

Carlton's company is pioneering the delivery of a Java-based Enterprise Resource Planning (ERP) applications over the Internet.

The made-in-Malaysia BizTone suite of applications is given away free, but adopts a transaction-based business model, where third-party service providers will sell BizTone services to corporate customers then pay the company on a pay-per-use basis.

"This completely eliminates the need for on-site installation or the purchase of expensive software," said Carlton.

Carlton believes all applications will be delivered over the Internet by the year 2005.

"The Internet is the glue that binds businesses together. It will be as ubiquituous as the telephone and all business processes will be automated to fully execute across those connections, " he said.

Carlton, who heads a 50-man research team in Malaysia, says the country has the talent and the legal and administrative infrastructure to become a leading developer and exporter of software and services.

"What Malaysians lack is creating products for a global market, and the skills and international experience needed in product management and marketing, " he said.

Although Carlton moved headquarters from Australia to Malaysia two years ago, he was forced to split his operations recently, between the Silicon Valley and Malaysia, to raise the profile of the company.

"Malaysia is the right place to build products, innovate and do complex development work, but it is not yet ready for sales and marketing activities for the global marketplace," he said.

Carlton says another stumbling block is the non-existence of an effective venture capital base and equity market for high risk high-tech ventures.

The financial crunch dealt a severe blow to capital-hungry start-ups in the MSC.

Their plight was worsened with one-and-half year delay of Mesdaq, a yet-to-be-launched new local stock exchange fashioned after the US' Nasdaq and set up specifically for high-tech companies.

Carlton expects that the local venture capital investment climate is likely to change only after Malaysian companies score successes abroad on their own steam. is seeking a listing on Nasdaq this year.

Researcher Sureswaran Ramadass says close collaboration between the corporate sector and tertiary institutions is a key factor in developing a successful product.


Sureswaran led a team of researchers of the Science University of Malaysia in Penang and local start-up Multimedia Research Lab Sdn Bhd to invent a multipoint-to-multipoint video conferencing system.

Sureswaran says the collaboration proved its effectiveness to all parties - the researchers were freed to concentrate on their work, and the company and university benefited from profit-sharing when the product became commercially viable.

"Local universities have their limitations in terms of funding and capital. Companies need to come in to provide the finance, especially if they see the commercial possibilities," he said.

He adds that most research now is government-led with not enough private companies coming forward to participate.

"The MSC may be effective in raising the ante from the private sector," he said.

As of April, over 205 local and foreign companies have signed on to the MSC project. Of these, 29 are regarded as global technology players including giants Microsoft Corp, Intel Corp, Sun Microsystems Inc, Siemens AG and Nippon Telegraph and Telephone Corp (NTT).

The government is hoping that these "anchor" companies will aid in incubating smaller companies to access financing, and share technical, marketing and management know-how. (Published in Nikkei Electronics Asia, June,1999)

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Hartmut Hennige's e-pass
Iris Technologies Inc

Copyright 1999 Julian Matthews.   Disclaimer