Prime Minister Mahathir Mohamad launched HSBC's 20-million-dollar group processing centre and Ericsson's 21-million-dollar regional expertise hub in the Cyberjaya township in the Multimedia Super Corridor (MSC) for high-tech firms.

Mahathir said the MSC, which he launched in 1996 to steer Malaysia towards a knowledge-based economy, had proven critics wrong and was now a "success" after surpassing its targets.

"There are still many people who doubt the MSC but there are more than 800 companies operating here now. We only wanted 500 companies by 2003 so if this is not success, I don't know what is," he said at the Ericsson launch.

Later, opening the HSBC centre nearby, the premier said the government was not too worried about sceptics as its investor-friendly policies had paid off.

"We are familiar with people telling us that what we are doing is wrong but it has been shown that they'll have to swallow their words later on," he said.

"We want to move along with the rest of the world and want to ensure that we are conversant with state-of-the-art technology."

The HSBC centre is its first in Southeast Asia and its sixth and largest worldwide.

It is due to be fully operational in January, with some 550 staff servicing the United States, Britain, Canada, Singapore, New Zealand, Australia and the Middle East.

HSBC Bank Malaysia chief executive Zarir Cama said the group had explored many countries but picked the MSC as its regional site because of good infrastructure, attractive tax incentives and government support.

On the other hand, Ericsson selected the MSC because Malaysia was among the first in the region to take a position in embracing third generationtechnology, said its Asia Pacific president Ragnar Back.

He said the centre would showcase mobile telecommunication networks from GSM to 3G, and its 500 engineers and staff would support 3G growth in the region.

Ericsson foresees a demand boom 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. Significantly, the overall penetration rate in the region is still low at 11 percent.

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

The launch of the two regional centres in the MSC adds another feather in the cap for the 77-year-old Mahathir before his retirement in October after 22 years in power.

The hi-tech enclave stretches about 50 kilometres (30 miles) south from Kuala Lumpur to the new international airport.

Mahathir has previously said the hub had not contributed to the economy as much as he expected. Critics have complained of a lack of focus, excessive bureacratic red-tape and a shortage of skilled labour.

SPACE.WIRE