Spending to fall by half in 2009

Thailand's spending on information and communications technology will grow by only 6.7 per cent in 2009, little more than half of the 12.9-per-cent year-on-year growth rate in 2008, according to global market intelligence firm International Data Corporation (IDC).

The decrease will be a result of the global economic downturn and Thailand's political situation, which will affect the country's overall business and consumer confidence, as well as budget cutting and delayed IT investments among industries such as financial services and manufacturing.

IDC also forecasts a slowdown in spending on some IT products such as personal computers and peripherals, as consumers try to extend product lifecycles and delay upgrades and replacements.

However, it expects mini-notebook shipments into Thailand to grow by 126 per cent this year, driven mainly by high-profile projects such as Green WiFi in Bangkok and the roll-out of more hotspot areas by service providers.

A growing number of people are connecting to the Internet at public hotspots in Thailand and mini-notebooks will become popular because they are lightweight, easy to carry and inexpensive, it said.

Many major PC vendors will enter the mini-notebook market, intensifying competition and resulting in price wars and product differentiation on design and functions.

However, there are several pockets within Thailand's ICT market that warrant optimism, said IDC Asean's senior analyst for IT services research Attaphon Satidkanitkul.

The government has introduced several measures to fuel spending within the Thai economy, and investment in IT under the ICT Master Plan II and the new government centre is a significant part of the government's 2009 budget. This government allocation will be a vital investment driving IT optimisation and infrastructure development in Thailand during the year.

"Concurrently, Thailand's IT businesses looking for growth in [the slow] economic environment will have to consider cutting costs, improving their business models and reaching customers more effectively," Attaphon said.

He said that government support, along with significant developments in areas such as 3G and WiMax and the wide adoption of Web 2.0 and managed security services would accelerate the country's ICT spending in 2009.

The granting of 3G commercial licenses, expected in the first half of 2009 with services coming in the second half, will help jump-start investment activities, especially in the area of 3G infrastructure and content.

"Moving from being purely voice-centric to a preference for converged capabilities in devices, the availability of 3G services will change consumer behavior and demand, and transform the competitive landscape of the mobile devices market," Attaphon said.

It is also expected that the government will deploy Internet-protocol (IP) surveillance systems in 2009. The project will combine IP technology and security systems, leading to an increase in Internet-bandwidth consumption and compelling Internet service providers to upgrade and enhance their infrastructures.

Moreover, IDC expects WiMax licensing, to be conducted by auction in the first half of this year, to be a starting point for the roll-out of infrastructure based on WiMax technology. This is seen as a key tool for increasing broadband penetration and providing connectivity to a wider number of people in Thailand.

As well, mobile number portability, which is due for implementation in 2009, is seen as a positive reform by the National Telecommunications Commission.

IDC foresees intensifying competition for customer loyalty, leading to new business models and forcing mobile operators to offer their customers better incentives and stronger value propositions to stay ahead of the competition.