Government urged to expand digital grants for SMEs in Budget 2025

KUALA LUMPUR - The government has been urged to expand digital grant incentives for businesses, particularly small and medium-sized enterprises (SMEs), in the upcoming Budget 2025 to accelerate the adoption of emerging technologies, an analyst said.

GlobalData Technology principal analyst Alfie Amir suggested that the government should maintain its efforts to accelerate the uptake of information and communication technology (ICT) services, such as cloud computing and cybersecurity, while broadening support to cover a wider range of technologies and industries.

"Telecommunication companies (telcos) are increasingly expanding their portfolios beyond connectivity, offering ICT services such as cloud, data centres, collaboration tools, industrial Internet of Things (IoT),and cybersecurity to enterprises.

"However, overall demand and adoption in the country remain low. These incentives or grants could boost adoption and, in turn, drive telcos' enterprise ICT business," he told Bernama.

Alfie further highlighted that lowering barriers for telcos to deploy emerging technologies-such as artificial intelligence (AI) and generative AI, 5G and 5G-Advanced, Virtualised Radio Access Networks (RAN) and Open RAN-could also accelerate digital adoption within the sector.

This includes leveraging these technologies for network operations, customer engagement and internal productivity.

"These can serve as incentives for telcos to implement new technologies, or foster industry collaborations to drive the ecosystem and enable telcos to enhance operational efficiencies as well as improve their service offerings.

"It is crucial due to the increasing margin pressure faced by telcos as a result of a maturing market and higher operating costs stemming from macroeconomic factors such as currency fluctuations and inflation," he added.

Continuous support for 5G infrastructure

Telecommunication infrastructure provider Edotco Group Sdn Bhd has urged the government to continue supporting the expansion of 5G infrastructure to improve nationwide connectivity, particularly in underserved areas.

Edotco's chief executive officer Mohamed Adlan Ahmad Tajudin, argued that a faster 5G rollout is essential for Malaysia’s digital transformation, fostering innovation and supporting economic growth.

"Streamlining regulatory processes and reducing barriers to new infrastructure development will help accelerate progress,” he said, noting that telcos in Malaysia are facing rising energy consumption and costs due to increasing demand for network access.

Meanwhile, from an industry perspective, Alfie identified 5G regulation as a key area that could help address the challenges telcos face in fully leveraging 5G technology.

"5G development in Malaysia is lagging behind other markets due to the current network deployment structure, which restricts telcos’ innovation and their ability to differentiate in the market," he opined. - BERNAMA