Malaysia has come a long way since gaining independence from the UK in 1957, when rubber and palm oil were its principal exports. Today, electronics and electrical machinery are the big export earners, and the country's 26 million inhabitants enjoy the second-most vibrant economy in South East Asia. There is even a fledgling space program, with their first astronaut set to hitch a ride with a Russian mission in 2007. Malaysia has set its sights high.

It has also invested heavily in information and communications technology (ICT). The country's Multimedia Super Corridor (MSC) was designed to create an ideal environment for ICT-related production and R&D - South East Asia's answer to Silicon Valley. A set of incentives called the "Bill Of Guarantees" are offered to ICT companies, both foreign and home-grown, to set up their headquarters or IT hubs in the MSC, with priority given to outsourcing centers. The brainchild of former Prime Minister Mahathir Mohamed, it is part of a long-term plan to help Malaysia reduce its dependence on manufacturing as it loses some of its cost-competitiveness to countries like China. A strong IT-based economy is envisaged to propel the country towards achieving developed nation status and be an information-rich society by 2020.

Malaysia's telecoms industry is something of a barometer for the ICT readiness of the country. In autumn 2005, Malaysia had 17.5 million cellular and 4.3 million fixed line subscribers. Cellular penetration now stands at 67%, while fixed lines account for 16.5%. Malaysians sent around 6 billion SMS messages during 2005. Broadband penetration, however, remains very low at around 2%, which has led the government to launch a National Broadband Plan aimed at increasing penetration to 10% by 2008 (around 2.8 million broadband connections).

The telecoms industry is emerging from a state of rationalization over the past 10 years. Telekom Malaysia is the previously state-owned supplier of fixed line and cellular services. The monopoly was ended in 1994 with the licensing of several new competitors. While the company still dominates the market, accounting for around 86% of all fixed line revenues, it is struggling to maintain market share in the mobile arena, facing stiff competition from the market leader, Maxis, and a third operator, DiGi, a Telenor subsidiary. Telekom Malaysia is also the main supplier of broadband services throughout the country.

In the fixed line market, Telekom's main competitor is TIME dotCom and, to a lesser extent, Maxis Communications. In the cellular field, it faces Maxis Mobile and DiGi. Telekom Malaysia and Maxis both received 3G licenses in 2003, and the first services were inaugurated at the end of 2004.  DiGi has also recently joined the bidding for a 3G licence, along  with contenders TIME dotCom and a TV broadcasting company, MiTV. Maxis is planning to launch HSDPA by the end of Q1 2006, the first in South East Asia.

Ericsson's recent appointment to provide its push e-mail and video telephony solutions to Maxis, together with the Ethernet DSL Access solution for TIME dotCom's high performance broadband, is just part of the company's long-term commitment to development of the Malaysian telecoms market. "Malaysians are optimistic and upbeat about the future of their country," says Jan Signell, President of Ericsson South East Asia. "And we're proud to continue the close relationship that we've built since the early days of telephony in the country."

Ericsson's first representative office opened in Kuala Lumpur in 1959, and was awarded the contract to supply, install, test and commission the first crossbar exchange in 1965. The company has enjoyed a long and successful partnership with the country, being part of several milestones in Malaysian telecommunications history. It was first to supply a mobile network in 1984, and first to supply a digital cellular network. A year later, it supplied Malaysia's first GSM 900 and GSM 1800 networks to Celcom and DiGi respectively. Maxis granted Ericsson the country's first contract for the supply of 3G systems in December 2003, a partnership that will also see the launch of HSDPA.

"I think that it's significant for the country and for us that we have been selected by TIME dotCom and Maxis as key partners for their advanced technology enhancements." says Signell. "And when the first Malaysian goes into space, you can be sure that the whole country will be looking firmly toward the skies."