FiberConnect APAC 2026: Malaysia and AI on the verge of vast data consumption

Malaysia's journey to digital transformation is propelled by AI and emerging technologies, which are driving demand for high-capacity fiber connectivity and robust digital infrastructure. The market's capital city has recently been listed in a smart city index, but still faces challenges in translating technological investments into meaningful improvements in consumers' daily lives. These are the key discussions from the recently concluded FiberConnect APAC 2026 Conference, held on Oct. 14-15 in Kuala Lumpur, Malaysia.

Ministry of Communications Malaysia Deputy Secretary General Mano Verabathran said, "We must not overlook the physical digital infrastructure that makes these innovations possible. The AI revolution is only as strong as the infrastructure that supports it. And the heart of the infrastructure is fiber connectivity. Fiber networks are fundamental to the AI economy, connecting data centers, mobile networks, enterprises, homes, smart cities, cloud infrastructure, and international networks. As data volumes and digital traffic continue to grow, the demand for faster, more reliable, and high-capacity connectivity will only increase."

Also, Verabathran highlighted how the AI revolution in Malaysia has created a huge appetite for data and computing capacity, reshaping the market's approach to digital infrastructure development. Malaysia's location in Southeast Asia, combined with its growing digital economy and expanding data center ecosystem, positions the market to participate in the regional digital infrastructure landscape. However, Verabathran stressed that the challenge extends beyond building networks and they need to develop infrastructure that is "high-capacity, resilient, secure, scalable, and sustainable."

"Once the infrastructure is in place, how do we ensure that more people and businesses actually use it to create theirs? The next chapter of connectivity is about more than building the network. It is about what network makes possible," said Datuk Zurkarnain Mohd Yasin, Malaysian Communications and Multimedia Commission Senior Advisor on Operations, at the beginning of his speech. Malaysia has invested in initiatives such as the National Digital Network Plan (JENDELA) and the Point of Presence (PoP) Project, expanding broadband infrastructure, particularly in rural and underserved communities.

Malaysia's 2027 budget announcement reaffirmed the government's commitment, with RM5 billion in total investment prioritizing nationwide connectivity. However, Yasin refuted that infrastructure deployment alone does not guarantee success, as the full value of connectivity investments is realized only when households subscribe, schools connect, businesses utilize services, and digital tools become integrated into everyday life. Operators play an important role in translating infrastructure into services that people can understand and rely upon, alongside affordable packages, reliable customer experience, relevant applications, and support for users navigating digital change.

"…AI itself is not standing on its own. Well, I would say that it is not... a solution on its own, it depends on a lot of things. But what is happening today is that we know that this AI has been a talk of the town, and everyone doesn't want to miss that opportunity being in AI," said Telekom Malaysia (TM) Chief Network Officer Mohamed Tajul Mohamed Sultan about how operators are preparing infrastructure for the AI era. With 80 years of history serving Malaysia, TM has deployed over 700,000 kilometers of fiber nationwide, alongside 33 submarine cable systems connecting Malaysia to the world.

The challenge for operators extends beyond physical deployment to building programmable, autonomous networks that operate efficiently without constant manual intervention. According to Sultan, TM has integrated AI engines into daily operations, enabling proactive service management. When service degradation occurs, AI systems identify the issue, determine required actions, pinpoint locations, identify affected customers, estimate restoration times, and facilitate stakeholder communication. This transformation from reactive to proactive operations represents a shift in how telco services are delivered.

AI-driven network management enables TM to notify customers of service issues before they experience problems, moving away from traditional models in which customers had to report outages themselves. The telco guarantees 24-hour service restoration, a promise enabled by AI-powered predictive maintenance and rapid response capabilities. Sultan expressed that, looking ahead, AI adoption will extend to network planning and optimization, helping to deploy infrastructure faster and engage more effectively with stakeholders, including local authorities whose approval processes can impact deployment timelines.

The panel discussion on Malaysia's smart city readiness revealed both progress and persistent challenges. Syarifah Nuraida of PLANMalaysia cited that in the IMD Smart City Index, Malaysia's Kuala Lumpur ranks 65th among 148 cities. Malaysia has established a smart city certification framework through the Ministry of Housing and Local Government's PLANMalaysia, recognizing local authorities across four levels, from Smart City in Action (complying with basic policy, governance, and infrastructure requirements) to Visionary Smart City (meeting all 85 indicators).

However, panelists emphasized that smart city success cannot be measured by technology deployment alone. The true test lies in tangible improvements to citizens' daily lives — reduced travel times, fewer accidents, reliable public services, and zero frustrations. Effective smart city implementations require three connections: physical infrastructure (sensors, CCTV, traffic systems), information integration (data sharing across agencies), and engaged stakeholders willing to collaborate across organizational boundaries.

The speakers emphasized that effective smart mobility and traffic management depend on three interconnected pillars: robust digital and physical infrastructure, seamless information sharing, and strong coordination among authorities and stakeholders. Norhizam Abdul Kadir stressed that infrastructure, information, and, most importantly, authorities must be connected, while Ahmad Muhsin Mubarak underscored the need for a formal data-sharing framework, clear governance, and secure digital infrastructure. Looking ahead, Syarifah Nuraida identified spatial planning and digital integration as key priorities. Lim Poh Teot reinforced these points by noting that governments need visibility into major traffic flows, hardware readiness must be ensured, and information must be transmitted in near real time, often within seconds or milliseconds, to support effective decision-making and responsive traffic systems.

With the market's investments in digital infrastructure to support the increasing demand of AI and data-intensive applications, Malaysia's fiber broadband market is projected to experience steady growth, with revenue increasing from $1.80 billion in 2025 to $2.60 billion by 2032, while average revenue per user (ARPU) is expected to rise from $31.14 per month to $34.05 per month over the same period, according to S&P Global Market Intelligence Inc. estimates.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.