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Big Players Vie for Internet Data Center Business

The Internet data center (IDC) market in Malaysia is heating up with several foreign players entering the fray.

Pacific Century CyberWorks (PCCW) Ltd, DataOne Asia Pte Ltd and EasyCall International Ltd are setting up their Internet "hotels" to exploit expected demand for Web-hosting and co-location services.

The aggressive moves may have been prompted by the government's easing of rules for foreign companies to offer Internet access and application services in August.

PCCW managing director for global communications services, Keith Harrison, said the company is rolling out a range of e-business enabling services to provide corporations with "industrial-strength" Internet connectivity.

"We will provide a full service data center that will enable our business clients to outsource their IT infrastructure and focus on their core business more effectively," he said.

He added the set up is part of PCCW's regional expansion plans under a joint-venture with Australia's Telstra Corp to provide a string of carrier-class data centers in Singapore, Thailand, the Philippines, Korea, Indonesia, Brunei, Vietnam and India.

Key Market Strategy

Singapore-based DataOne Asia has laid out an initial investment of US$2.9 million to have two data centers in Malaysia by the end of the year.

A unit of Singapore-listed Keppel Telecommunications & Transportation Ltd, DataOne also has a joint-venture with Telstra and is expected to go toe-to-toe with PCCW for the same key markets in the region including Singapore, Thailand and the Philippines.

DataOne CEO Andrew Lee said the company has earmarked US$17 million to US$28 million for its expansion plans region-wide.

"We believe the Internet hosting market in Malaysia is set to boom, especially as more companies realize that outsourcing their Internet infrastructure and hosting needs will maximize efficiency, trim overhead costs and sharpen their business edge," he said.

DataOne is targeting multinationals, dotcoms and small-and-medium enterprises for its server co-location, dedicated hosting, facility management services, and network management services.

Messaging company EasyCall International which is transforming itself into an Internet infrastructure company has spent over US$1 million already for a data center in Malaysia with plans to raise the investment to US$2.6 million over the next year.

Huge Growth Forecast

Listed on Singapore and Sydney stock exchanges, EasyCall offers network services for corporate Web access, content and application hosting, high-speed voice and data communication services, and virtual private networks. On the drawing board are Web-enabled call center services.

EasyCall executive chairman Chan Wing Leong has also touted Malaysia's potential for high-end Internet services, and was looking to grow its customer base 10-fold over the course of 12 months.

EasyCall already has a data center in the Philippines and has similar plans to its rivals to set up centers in Singapore, Thailand and Indonesia and other markets.

Tan Tze Meng, a general manager with local data center consultancy IDC Consult.com Sdn Bhd believes the move to enter the Malaysian and Asian market is because the cost of bandwidth is "ridiculously expensive."

"The cost of 64Kbps leased line here is equivalent to a T1 (1.54Mbps) in the US. Many local dotcoms actually host in the US. So data centers with US-styled aggressive pricing will have a big market here," said Tan.

by Julian Matthews, Kuala Lumpur

(December 2000 Issue, Nikkei Electronics Asia)

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