Services providers told to set up Internet exchange

Local Internet service providers and infrastructure owners have been, told to set up Malaysia's very own Internet exchange by year end, to reduce' foreign exchange losses and costs of Internet connection and to improve connectivity. Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik said two meetings have already been held to discuss the matter. The meetings were between the Malaysian Communications and Multimedia Commission (MCMC) and industry players and the companies have shown interest in making the plan work. Dr Lim said setting up the exchange is vital as the country has missed out on some revenue generated by the increasing trend to" wards Voiceover Internet Protocol (VoIP) technology. VolP enables phone calls to be carried over the Internet. Malaysia's VolP business is expected to generate RM1.5 billion in revenue, by the end of 2010, almost double the figure seen this year. Currently, when one sends an e-mail or makes a VolP call to another party within Malaysia, the e-mail or call may be routed to Singapore or the US before it reaches the recipient. It is believed that over 80 percent of the local VolP calls go to Singapore and this is resulting in forex losses for Malaysia. "We are losing a lot of foreign exchange by redirecting our calls and Internet connections," Dr Lim told reporters after the launching of REDtone International Bhd's TravelFon in Kuala Lumpur yesterday. He did not disclose the amount of cost-savings that could be derived from the setting up of the exchange. The exchange is expected to be set up by year-end, before Dr Lim takes leave to go to Australia. "Let me promise you. We will have our own Internet exchange and all local traffic will be switched locally... I have told them (industry players) that they should set one up by the end of this year," Dr Lim said “Should the exchange not be set up by then, Dr Lim said he would consider a ministerial directive to make it happen.”But don't force me ... (try to) do it voluntarily," he added. Initiatives to set up a local Internet exchange are not new. In 1997, Digital Equipment Corp and Warga media Sdn Bhd had attempted to set up the exchange, but the project failed to take off. Meanwhile, Dr Lim said he does not expect any WiMAX licence to be awarded anytime soon.On the latest figure of the registered prepaid users, he said there-were 8.04 million registered users as of September 17.