Bangkok--27 May--IDC
Thailand’s political instability has swiftly disrupted ICT investment priorities, resulting in a smaller than expected rise in the country’s ICT market.
Several ICT sectors have also been impacted directly and indirectly by the crisis. These were revealed by IDC Thailand in its recent update to the media on the impact of the ongoing political instability on technology-related spending.
IDC had earlier forecasted annual growth in the Thai ICT market to be one of the highest in the region, but now believes that growth has been cut significantly. An annual growth rate of 5.5% is expected, for a total market of US$25.3 billion in 2014.
“It now appears that the ICT market lost at least US$750 million during the past six months that the political crisis intensified," says Mr. Michael Araneta, head of Operations for IDC Thailand.
Mr. Michael explains that although various sectors have been impacted differently by the ongoing crisis, the greatest impact is in government projects that have been either postponed or canceled altogether.
“Most of these projects had significant software and services components. Also, what was unfortunate with regard to these government projects is that local software developers and system integrators were supposed to be heavily involved in deployment. In effect, local firms have been impacted drastically.”
The table below shows how the crisis has impacted various ICT sub-segments.
Table 1: Impact of Crisis on Select ICT Sub-sectors in Thailand
Sectors Maintaining Medium-to-High Growth in 2014 Neutral Impact Severe Negative Impact
Datacenter services Mobile phone Government spending on software and ICT services
Cloud Telecom service/equipment spending decisions by private firms PC and tablet market
Security software and services Financial services technology Government telco spending
Infrastructure management Hard copy peripherals Manufacturing industry spending on software and ICT services
Source: IDC Thailand, 2014
Mr. Jarit Sidhu, Senior Market Analyst for IDC Thailand says, "The consumer and SME segments are also heavily impacted by the political instability as consumer spending and business investment dropped to record lows. The PC and tablet markets have taken the hardest hit.”
He points out that even though the mobile phone market has proven to be relatively more immune, consumers have been swayed to purchase more affordable products.
Mr. Jarit adds, "IDC estimates that the political turmoil will pose a negative 20% impact on the PC market and negative 27% on the tablet market in 2014, while the impact on the mobile phone market will only be negative 4%."
Covering the telecommunications sector, Neeranuch Kanokvilairat, Senior Market Analyst, adds "Telecom service/equipment spending decision by private telecommunications firms are being delayed as companies are likely to take a wait-and-see position and only spend on necessary items."
Other sectors have, however, seen a steady rise in ICT investments. The datacenter market has been seeing an uptick as companies focus on business continuity issues.
According to Mr. Michael, datacenter expansion and IT asset virtualization are gaining momentum.
“This has led to still-healthy demand for storage and security software by Thai enterprises, as well as notable growth in infrastructure management and IT managed services.
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