ICT market sees big loss from political instability

Economy May 22, 2014 00:00


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THE POLITICAL instability has swiftly disrupted ICT investment priorities, resulting in a smaller-than-expected rise in the market for information and communications technology, according to International Data Corporation.

“It now appears that the ICT market lost at least US$750 million [Bt24.4 billion] during the past six months that the political crisis intensified,” Michael Araneta, head of operations for IDC Thailand, said yesterday.

Several ICT industries have been affected directly or indirectly by the crisis, according to IDC Thailand’s recent update to the media on the impact on technology-related spending.

IDC had forecast growth in the Thai ICT market to be one of the highest in the region, but now believes that growth has been cut significantly to 5.5 per cent for the $25.3-billion market this year.

The greatest impact is on government projects that have been postponed or cancelled altogether.

“Most of these projects had significant software and services components. Also, what was unfortunate is that local software developers and system integrators were supposed to be heavily involved in deployment. In effect, local firms have been impacted drastically.”

Jarit Sidhu, senior market analyst, said the segments catering to individuals and small and medium-sized enterprises were also hit hard as consumer spending and business investment dropped to record lows, with the personal-computer and tablet markets taking the heaviest impact.

Even though the mobile-phone market has proved more immune, consumers have been swayed to purchase more affordable products.

The political turmoil is estimated to pose a negative 20-per-cent impact on the PC market and negative 27 per cent on the tablet market this year, while the impact on the mobile-phone market will only be negative 4 per cent.

Another senior market analyst, Neeranuch Kanokvilairat, said telecom service and equipment spending decisions by private telecommunications firms were being delayed as companies were likely to take a wait-and-see position and only spend on necessary items.

Other industries have seen a steady rise in ICT investment, such as the data-centre market as companies focus on business continuity issues.

Araneta said data-centre expansion and IT asset virtualisation were gaining momentum. This has led to still-healthy demand for storage and security software by enterprises, as well as notable growth in infrastructure management and IT managed services.