Datacom expands in Malaysia

“That mission helped demystify the commercial environment for us and played an important part in the early establishment of our business in Malaysia,” Browne says.

At that time the New Zealand-spawned professional IT services company had just 12 staffers in the region.

Now Datacom is a major success story and is widely credited as a true exemplar for the New Zealand Government’s drive to see Kiwi companies prosper by building offshore operations and becoming successful global competitors.

Its Malaysian call centre operations are going gangbusters – a factor that was recognised when Prime Minister John Key officially opened the company’s second Malaysian office while in Kuala Lumpur for the signing of New Zealand’s bilateral free trade deal with Malaysia.

Within Malaysia, Datacom offers the full gamut of ICT services: Systems development, managed service and business process out-sourcing through contact (call) centres. Earlier this year it formed a joint-venture with SAP – the world’s leading business software and telemarketing services company – to establish an operation in Malaysia to provide business process out-sourcing from nine countries in the Asia-Pacific.

When Datacom selected Kuala Lumpur as its regional hub for Asia in 2000 it was attracted by its educated population base – a multilingual workforce, English widely spoken, 80,000 plus graduates each year and the fact that 50 universities had IT programmes.

Central to Datacom’s success in Malaysia was its decision to take advantage of the Malaysian Government’s multimedia super corridor initiative (MSC), which was spearheaded to promote the growth of the national ICT industry and provide a test-bed for the global ICT industry to develop leading edge technologies.

To facilitate this initiative Malaysia established the Multimedia Development Corporation (MDEC).

“For any business in the technology and communications sectors,” says Browne. 

“The MDEC has much to offer.”

Among the benefits he cites: No tax on company profits for five  years, which can be extended for a further five years; the ready ability to bring in expat workers, the waiving of importation tax on key items of plant and equipment, and help in recruiting appropriate people.

There is also the ability to access seed funding. The recent bilateral free trade agreement between New Zealand and Malaysia will have little specific effect on Datacom – apart from generating more goodwill towards New Zealand-originated companies.

“If we were not eligible for the MDEC programme the FTA would have had a direct set of benefits for us.

“Particularly the ability to readily bring in and maintain a number of expats being high amongst them,” says Browne.

For his part, John Key credits the fact that about 15,000 Malaysians have been educated in New Zealand as strengthening the relationship.

“If you look at the number of foreign PhD students studying in New Zealand, Malaysia represents the highest percentage,” he notes.

Browne readily concedes that in New Zealand, Datacom remains a “relatively unknown brand” despite its size and extensive capabilities.

It is an unlisted public company with directors, management and employees owning 65 percent and NZ Post holding the remaining 35 percent.

But this 43-year old company's major successes offshore were recognised at this years Deloitte/Management Magazine Top 200 awards where the company took out the 2009 award for the best growth strategy. And in Malaysia, where it has won the gold awards for its contact centre operations.

The metrics prove the point.

At a time when many New Zealand companies have struggled to offset the downstream effects of the global financial crisis, Datacom has grown its revenues by another $100 million to post annual revenues in excess of $600 million. In addition, it currently has 3000 staff across four countries.