Thai ICT market looks set to return to solid growth

While the information and communication technology market in Thailand has experienced flat growth this year due mainly to the stifling effects of the political situation during the first half, it is expected to return to solid growth in 2015 thanks in large part to replacement orders in the commercial, government and enterprise market.

Narong Intanate, executive chairman of The Value Systems, said the ICT market during the first half of the year had faced difficulties due to the troubled political situation in the country, which resulted in the mobility, infrastructure and enterprise market witnessing flat overall growth. 

Meanwhile, the PC and notebook market experienced a contraction of 10-20 per cent over the course of the year. 

Next year, however, the mobility sector will still be majority driven by low-end smart phones, which he forecast would see growth of around 30-40 per cent from this year’s level, followed by PCs and notebooks, for which the commercial market will be purchasing replacement units. 

The commercial and government sector will also drive ICT market growth next year, he said.

“I think the overall ICT market and industry in Thailand this year has been a very challenging one for business, since the government [for much of the year] was not able to manage as a full government. 

“Next year, I think the market will resume double-digit growth of around 10-15 per cent, following the government’s plans and policies. Moreover, the factors driving market growth will be [the improved] political situation, while technological change, mobility, the bring-your-own-device [BYOD] trend, the digital-economy policy and social media will drive IT usage,” Narong predicted.

He added that mobility, the cloud and big data would be key factors driving ICT industry growth next year. 

Corporates will utilise the cloud to support their operational infrastructure and utilise new technology to analyse their customers, said the executive, while the government’s mega-projects and the goal of creating a logistics hub for Indochina will also drive the ICT sector and economic growth of the country as a whole.

Narong also identified Indochina and Asean as a high-potential market for Thai companies wanting to expand their business base, since Indochina is an emerging market with great growth potential. 

He sees the Thai market as a “measured” market, in which ICT market growth will come in at around 5-10 per cent annually during the next five years, while revenue from foreign markets such as Myanmar, Laos, Cambodia and Vietnam will expand to around 50 per cent of ICT income by 2020.

Vatsun Thirapatarapong, managing director of Cisco Thailand and Indochina, said overall IT market growth in Thailand for 2014 had been flat compared to last year, with a number of factors contributing to the situation, some of which had been beyond anyone’s control. 

However, Cisco in Thailand had outpaced the industry with double-digit growth during the year, he said.

“In 2015, I expect that businesses in Thailand will look to increase their service offerings, for example, offering video-user experiences for customers or using technology to optimise internal workflow, collaboration and citizen services,” he predicted.

He added that the National Statistical Office had reported in October that there were some 26 million Internet users in the Kingdom, and that the penetration rate of connected households had increased to 34.7 per cent, from 11.4 per cent last year.

Social-media users accounted for 25 per cent of the population, and smart-phone users reached 38 per cent, according to the agency.

Meanwhile, IDC forecast last month that IT spending in Thailand would rise by 10.6 per cent to US$13.4 billion (Bt441 billion) and that by next year, smart-phone penetration was expected to reach 50 per cent, compared with 37.7 per cent this year.

From these two sets of data, it can be seen that the skyrocketing rate of being connected and massively increased smart-phone usage will be key growth engines for the Thai ICT market next year, said Vatsun.

Cisco also believes the ICT market will be expanded by the increment of video, social, mobile, application and content driven by the Internet of Everything (IoE).

“We will see some initial deployment of IoE to connect data, people, process and things together anywhere, anytime on any devices,” said the managing director.

He added that other key trends foreseen for 2015 were in the areas of data-centre build-out for the business continuity; data virtualisation and big-data analytic tools to handle massive flows of information; early adoption of application-centric infrastructure networks; mobility and immersive video collaboration from BYOD and next-generation workplace deployment; adoption of private and hybrid clouds; and more focus on protection against advanced malware threats in organisations. 

“In the telecom space, we should see the roll-out of broadband access with FTTH [fibre to the home] and Docsis 3.0/3.1 to allow 100Mps-1Gbps speed; the self-optimised network [SON] that intelligently optimises mobile operators’ 3G/4G mobile networks; and the convergence platform for packet and optical core backbone,” he said.

He also said that the IoE – the networked connection of people, process, data and things – would be a key platform for years to come. 

Over the past year, IoE connections have soared from 10.7 billion to 13.7 billion things, and by 2017, the number of industrial connections will outpace consumer connections, and total connections will reach 50 billion by 2020. 

More firms will embrace IoE regardless of device and platform, it has been forecast.

Mobility will still be prevalent in the workplace next year, and higher smart-phone user penetration in Thailand and migration to these devices will continue to be the key revenue driver in the market next year, according to IDC. 

This will also be driven by office workers embracing BYOD in Thailand via smart phones and other smart devices, a trend that has started to be engrained in every sector, said the Cisco MD.

“Cisco next year will focus on partnering with service providers to build and expand the core business, from routing and switching in the mainstream in order to maintain our leadership in developing a borderless network. Moreover, mobility and our data centre/virtualisation business will also be a key business to create the potential to grow,” he added.