Swedish telecoms giant Ericsson said today it will open an RM80 million regional expertise hub in Malaysia next week to prepare for a potential boom in demand.

The centre, located in the Cyberjaya township in the Multimedia Super Corridor for hi-tech firms, will be launched on Tuesday by Prime Minister Mahathir Mohamad, said Ericsson Malaysia president Mats Olsson.

The Ericsson@MSC centre will showcase mobile telecommunication networks from GSM to third generation (3G) technologies and its 500 engineers and staff will support 3G growth in the region, he said.

Olsson said there was great long-term growth potential in the Asia-Pacific region which, excluding Japan, was the single biggest cellular market with 385 million subscribers out of 1.21 billion worldwide at end-June.

However, the penetration rate in the region is still low at 11 percent, he said.

Subscribers to double

By 2008, Ericsson forecasts subscriptions in Asia-Pacific to more than double to 900 million, accounting for about half of an estimated 1.9 billion susbcribers worldwide.

"Asia-Pacific will outgrow other regions in the world," Olsson said.

"As a regional expertise centre, Ericsson@MSC plays a vital role in ensuring that we not only have the technologies here but also the 3G experts that provide relevant support to our customers."

Ericsson's move to establish a regional hub in Malaysia is seen as a boost to the MSC, which was launched by Mahathir in 1996 as part of plans to turn Malaysia into a developed nation by 2020.

Olsson said Malaysia was a natural choice because it was among the first in the region to take a position in embracing 3G technologies.

Ericsson has submitted tenders for supplying equipment to the country's two 3G licence holders, Telekom Malaysia and Maxis Communications, both of which were expected to roll out services from 2004, he said.

Speedy access

Olsson said Malaysia's mobile systems market in terms of spending by telecom firms has shrank substantially this year due to an industry consolidation and the migration to 3G, which allows speedy access to data and video through the Internet.

"This is a transitional year for the Malaysian market because of the merger of telecom companies from five to three and due to the ongoing 3G tender processes," he said.

"I expect we will see growth again at a healthy rate next year."

The downtrend is also in line with the global market which slumped 20 percent last year and is expected to fall another 10 percent in 2003 for the third straight year, Olsson said.

He said the mobile penetration rate in Malaysia currently stood at 37-38 percent, with 10.35 million subscribers currently, which should rise to 14.8 million by 2006 following industry consolidation and the introduction of new services.

Malaysia's top operator Maxis has tied-up with TimeCel, while state-owned Telekom has merged its cellular arm with Celcom, leaving third operator DiGi Telecommunications behind. - AFP