VZCZCXRO5721
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHKL #0912/01 3160848
ZNR UUUUU ZZH
R 120848Z NOV 09
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC 3413
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 02 KUALA LUMPUR 000912 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/MTS FOR DBISCHOF 
 
E.O. 12958: N/A 
TAGS: EAGR PREL ECON MY
SUBJECT: MALAYSIA: AMBASSADOR REVIEWS BUSINESS OPPORTUNITIES WITH 
TELECOM MALAYSIA CEO 
 
¶1. (SBU) Summary:   Telecom Malaysia (TM) Group Chief Executive 
Officer (CEO) Zam Isa discussed business opportunities in Malaysia's 
telecom sector with the Ambassador in a November 3 meeting.  Zam 
emphasized that TM was looking for strategic partners to develop its 
large enterprise division and increase its competitiveness, as well 
as core technology areas that might be suitable for US small and 
medium-sized  businesses.  The Ambassador reaffirmed the desire of 
U.S. private sector firms to work with TM and companies in 
Malaysia's quickly expanding Telecom and IT industry.    End 
Summary. 
 
Strategic Partnerships 
---------------------- 
 
¶2. (SBU) The Ambassador called on Telecom Malaysia CEO Zam November 
3 to discuss opportunities for American firms in Malaysia's quickly 
expanding IT and Telecom sectors as well as potential long-term 
partnering opportunities.  Zam reviewed the scope of TM's business 
lines: a) consumer, b) small and medium-sized enterprises (SME), c) 
large enterprises, and d) government.  He said TM was looking for a 
strategic partner for its large enterprise business line to help 
generate users once the required infrastructure was put in place. 
Zam told the Ambassador TM would be pleased to partner with American 
firms; the Ambassador welcomed Zam's openness and indicated ongoing 
interest from firms such as Cisco would, he was sure, continue to 
grow in the months and years ahead. 
 
¶3. (SBU) Zam said that the animation/entertainment market segment 
might also provide opportunities for U.S. and other foreign 
investors interested in working with TM in generating new content. 
He said that this segment also might provide opportunities for 
smaller and medium size companies. Other Research and Development 
projects involving compression technology and advanced content 
development might also provide opportunities for co-operation. 
 
TM plans - broadband and regional expansion 
------------------------------------------- 
 
¶4. (SBU) In reviewing the Telecom infrastructure for Malaysia, Zam 
said that Malaysia's backbone infrastructure for broadband network 
is quickly improving, but the "last mile" (network switch to home 
hookup) remains a challenge.  He pointed out that the 12,400 mile 
fiber optic cable recently (live testing requirements were completed 
November 11, 2009) linking Malaysia via Guam and Hawaii to U.S. West 
Coast should significantly improve bandwidth availability between 
Southeast Asia and the U.S., but he also acknowledged that most of 
the 500 GBps capacity is already sold. 
 
¶5. (SBU) Discussing business growth, Zam said that TM has to rely on 
broadband for its future expansion in Malaysia as TMs fixed line 
penetration is only 16 percent.  In order to remain competitive, Zam 
said, TM needed to be better positioned to provide broadband service 
and applications to homes and businesses, and TM also needed to 
consider regional expansion. 
 
Challenges 
---------- 
 
¶6. (SBU) Zam said that despite the opportunities in Malaysia and in 
the region, there were also specific challenges to attracting 
partners and foreign investors.  Malaysia was a small market, a long 
way from the U.S. and Western Europe.   Companies often did not have 
enough technical and other resources in Malaysia in order to prove 
their long-term commitment to partnering effectively with TM. 
(Comment: He may have sought to imply that Chinese telecom equipment 
manufacturers, such as Huawei and ZTE, have more technical resources 
in place. End Comment.)  The Ambassador and his team made a strong 
case for American firms' involvement acknowledging it was important 
to consider Malaysia's relatively small market in context, i.e. 
recognizing synergies that might exist with other ASEAN countries 
that could make the Malaysian market more attractive. 
 
Co-operation in Training and Education 
-------------------------------------- 
 
¶7. (SBU) Discussing overall educational needs, Zam pointed out that 
partnering with U.S. universities and colleges to train students 
from Malaysian and foreign students studying in Malaysia could 
benefit both Malaysia and the U.S. He said that Malaysia would gain 
a workforce with the needed technical skills for high tech jobs, and 
the U.S. would gain "technological ambassadors" of the U.S. 
educational system all over Southeast Asia and the Middle East. 
 
¶8. (SBU) Turning to specific proposals, Zam said that the Multimedia 
University, a fully owned subsidiary of TM had 20,000 students of 
which 4,000 were foreign students, many from the Middle East.  Zam 
said that the Multimedia University might be interested in joint 
programs with U.S. private sector affiliated technological training 
 
KUALA LUMP 00000912  002 OF 002 
 
 
institutions, such as Motorola University or Intel University.  Such 
schools might want to consider developing joint programs with the 
Multimedia University.  The Ambassador urged further discussion over 
time to help us develop tangible proposals for increased involvement 
in Malaysia of U.S. academic institutions. 
 
KEITH