Have you ever wondered how data generated in Malaysia (or anywhere in the world) gets transferred to a foreign data centre location? You might say that it is the work of internet connectivity. Well, technically it is not wrong, but it does not quite tell the full story. In reality, the vast majority of cross-border data transmission is carried through the physical infrastructure called the subsea (or submarine) cables, laid deep beneath the ocean floor. These cables form the invisible (and quite literally submerged) backbone of the global digital economy.
For Malaysia, subsea cables are not merely infrastructure – they are a strategic asset. Malaysia’s geographic position, sitting astride key maritime routes connecting the Indian Ocean to the South China Sea, gives it a natural advantage in the regional connectivity ecosystem. This is also probably the reason why Malaysia is home to over 20 submarine cables and more than 10 landing stations, making it one of the most important subsea cable hubs in Southeast Asia.
We can also see that the country is doubling down its focus on subsea cables. The Malaysian government’s Budget 2026 announced the Sambungan Kabel Dasar Laut MADANI (“SALAM”), a RM2 billion initiative to construct a 3,190km subsea fibre-optic cable system aimed at strengthening connectivity between Peninsular Malaysia and East Malaysia, including key landing points across Johor, Sarawak and Sabah. Even earlier in 2024, the Malaysian government made a significant policy shift by relaxing its cabotage regime, allowing foreign vessels to undertake the installation, maintenance and repair of subsea cables within Malaysian water. This move is widely seen as reducing regulatory friction and facilitating greater foreign participation, investment and technical capabilities in the sector.
Yet for developers, investors, telcos and hyperscalers looking to build or operate subsea cable systems in Malaysia, the regulatory landscape remains complex and multi-layered. This article maps out the key regulatory touchpoints and identifies the agencies involved.
The Licensing Foundation – Network Facilities Provider Licence
When it comes to network licensing, one will almost immediately think of the Malaysian Communications and Multimedia Commission (“MCMC”), which administers the Communications and Multimedia Act 1998 (“CMA”). The CMA establishes four categories of licence – Network Facilities Provider (NFP), Network Service Provider (NSP), Applications Service Provider (ASP), and Content Applications Service Provider (CASP). For subsea cable purposes, it primarily falls under the category of NFP licence. For any person that is looking to own, build, lay and operate subsea cable systems and cable landing facilities in Malaysia, an NFP licence would be required. This licence is the first and most fundamental regulatory hurdle for any project proponent in the subsea cable sector. Importantly, foreign ownership restrictions apply to NFP licences as a matter of regulatory policy and practice, effectively imposing a cap on the percentage of foreign ownership in an NFP licence holder. This makes ownership structure of a subsea cable project vehicle a key consideration from the outset.
If you think that getting the NFP licence means a subsea cable project can then be implemented or carried out, then you may have perhaps underestimated the complexity of the sector. Subsea cable projects are technically complex and operationally intensive, with the potential to create wide-ranging implications. Activities carried out on or near the seabed may impact marine ecosystems, interfere with established shipping routes, and affect seabed conditions in the surrounding area. If a newly proposed cable system project is going to be deployed in proximity to existing routes, concerns on damaging existing subsea cables may also arise. As such, obtaining the NFP licence is only the first step. The real heavy lifting starts at the point of getting the necessary approvals for the execution of a subsea cable project, which we will be briefly examine next.
The Approval for Subsea Cable Project
Building and operating a subsea cable in Malaysia requires navigating a distinct and separate layer of maritime and seabed approvals and/or consents. This is where the regulatory complexity truly lies, and where early legal engagement is most valuable. A project proponent must engage with multiple agencies, each with a distinct role, before they can execute a subsea cable project in Malaysia. We will be examining some of the key authorities or agencies which a subsea cable project proponent will be required to engage with.
1. National Security Council
Pursuant to the Exclusive Economic Zone Act 1984, the laying of submarine cables in the exclusive economic zone or on the continental shelf of Malaysia would require the consent of the Malaysian government as to the delineation of the course for the laying of such cables. To obtain such consent, one will have to engage the Malaysia National Security Council, who serves as the lead coordinating agency for matters involving national security implications of cable routing and operations.
2. Malaysia Marine Department
The Malaysia Marine Department (“MMD”) oversees the marine ecosystem in Malaysian water. An application for the proposed subsea cable system will have to be made with the MMD, who will determine whether or not a Marine Risk Assessment (“MRA”) is required, based on the proposed location and course where the subsea cable project will take place. If an MRA is required, the applicant will have to engage a consultant authorised by the MMD to carry out the MRA in order to assess associated risks and propose mitigation measures, subject to the approval of the MMD.
3. Department of Fisheries
The routing of subsea cables may intersect with fishing grounds or environmentally sensitive marine areas. As such, before a subsea cable project can be executed, the consent of Department of Fisheries Malaysia will typically be required, particularly where the proposed cable route may impact fisheries resources or designated marine zones. In practice, the Department of Fisheries Malaysia will assess the proposed routing of the subsea cable, taking into account potential impacts on fishing activities and marine ecosystem.
4. State Economic Planning Division
Typically, for a subsea cable to land in Malaysia, a cable landing station will be required to connect the subsea infrastructure to onshore telecommunications networks. The establishment of a landing station typically involves a range of state-level approvals, including engagement with the relevant State Economic Planning Unit, as well as planning and land-related approvals from local authorities and land offices. In many respects, this process is analogous to obtaining a development order for a physical infrastructure project, forming part of the broader regulatory framework governing land use and development.
Fragmented Subsea Cable Approval or Consent Framework
Having reached this part of the article, this should have probably crossed your mind – the Malaysia’s regulatory framework for subsea cable is fragmented. There is no single, dedicated piece of legislation governing the installation, operation, protection and repair of submarine or subsea cables. The framework instead consists of a patchwork of statutes and even policy framework in some instances.
The absence of a one-stop regulatory window means that project proponents will most likely have to navigate multiple agencies, each with different timelines, procedures, and institutional cultures. In the absence of formal coordinating mechanisms, the sequencing of parallel approval tracks becomes a matter of project management rather than regulatory design.
Given the complexity and multi-agency nature of the approval process, careful regulatory navigation becomes critical for any subsea cable project. In practice, project proponents often engage experienced external legal counsel to support the process, from advising on the applicable regulatory pathways, to preparing and coordinating submissions, liaising with the relevant authorities, and tracking the process of approvals. This structured approach not only helps to streamline the approval process, but also reduces the risk of delays, adverse conditions, or outright rejection.
The Technology Practice Group at Halim Hong & Quek is experienced in advising and assisting clients in large scale telecommunication and technology projects, including where the laying and operation of submarine cables are involved. If you have any questions or would like to enquire about our services, please feel free to reach out to the partners and co-heads of the Technology Practice Group, Lo Khai Yi and Ong Johnson, for more information.
Our Technology Practice Group continues to be recognised by leading legal directories and industry benchmarks. Recent accolades include FinTech Law Firm of the Year at the ALB Malaysia Law Awards (2024 and 2025), Law Firm of the Year for Technology, Media and Telecommunications by the In-House Community, FinTech Law Firm of the Year by the Asia Business Law Journal, a Band 2 ranking by Chambers and Partners and a Tier 3 ranking by Legal 500 on FinTech, as well as a Tier 4 ranking by Legal 500 on Technology, Media and Telecommunications.
About the authors
Lo Khai Yi
Partner
Co-Head of Technology Practice Group
Technology, Media & Telecommunications (“TMT”), Technology
Acquisition and Outsourcing, Telecommunication Licensing and
Acquisition, Cybersecurity
ky.lo@hhq.com.my.
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Ong Johnson
Partner
Head of Technology Practice Group
Fintech, Data Protection,
Technology, Media & Telecommunications (“TMT”),
IP and Competition Law
johnson.ong@hhq.com.my
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