KUALA LUMPUR (Nov 1): The government's decision to allow Elon Musk-linked companies Tesla and Starlink to operate in Malaysia as 100% foreign-owned companies is based on the anticipated benefits that the country would receive, according to Prime Minister Datuk Seri Anwar Ibrahim.

Anwar stated that the exemption for Starlink has been granted by the Ministry of Communications and Digital (KKD) through the Communications and Multimedia Commission Malaysia (SKMM) for the provision of satellite internet services in Malaysia.

"Starlink Malaysia was awarded Network Facilities Providers (NFP)(I) and Network Services Provider (NSP)(I) licences on July 17, 2023, valid for a period of 10 years," Anwar said in a written parliamentary response to Hamzah Zainudin (PN-Larut) on Tuesday (Oct 31).

Anwar explained that under the Communications and Multimedia Act 1998 (Act 588), NFP(I) and NSP(I) licence holders generally face a limit of 49% on foreign equity ownership. However, the Minister of Communications and Multimedia has the authority, based on recommendations and assessments by MCMC, to allow licensees to have 100% foreign ownership.

"Starlink applied for an exemption from this requirement. The approval for this exemption took into consideration factors such as Starlink's global organisational structure, which necessitates more efficient decision-making processes, the status of Digital Malaysia based on the Malaysian bill of guarantees (BoG), and the direct and indirect benefits of Starlink's services in Malaysia.

"Starlink's service is viewed as an alternative solution to satellite services in Malaysia, capable of addressing coverage gaps, particularly in rural and remote areas, without relying on the universal service provision (USP) fund," Anwar added.

He further highlighted that Starlink services are well-suited for use in the maritime and oil and gas industries, as Starlink's stable internet connection in remote areas, far from the coast or in the middle of the sea, provides high-quality internet access at all times. This efficient internet access enables these industries to monitor operations more effectively, enhance navigation safety, and facilitate remote control through effective automation systems.

As for Tesla, Anwar said that the company has been granted 100% foreign ownership, aligning with the government's policy to allow complete foreign ownership for new, expansionary, and diversification projects in the manufacturing sector for both existing and newly established companies, starting from June 2003.

For more Parliament stories, click here.