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Malaysian association expects eight per cent growth in ICT spending in 2010

AvantiKumar | Jan. 26, 2010
Government initiatives one of the reasons behind positive projection: PIKOM
KUALA LUMPUR, 26 JANUARY 2010 - The national ICT association of Malaysia, PIKOM, cites government initiatives as one of the reasons behind the association's positive expectations of eight per cent overall growth in 2010 in ICT spending.

PIKOM president, C.J. Ang, said: Though growth was moderate in the industry during 2009, we expect all sectors to improve significantly. Naturally, we do not expect a full return to double-digit growth as evidenced in 2006 and 2007 pre-recession, but we feel that current underlining economic conditions both locally and globally (especially in the US) are improving. This in turn will generate higher demand for ICT products and services.

Ang said three main factors had determined the projection. Government action: The incentives and tax breaks provided by the government will accelerate growth. We are encouraged by government spending to drive demand and stimulate other sectors.

Unutilised allocation from the 9th Malaysia Plan for ICT must be utilised by year's end, he said.  Furthermore, there are tax reliefs on broadband subscription as well as the one per cent reduction of income tax for selected groups which means higher disposable income for purchases.

In addition, the implementation of loans to civil servants for PC purchases every three years instead of the previous five years will also stimulate demand, added Ang. There's also the provision of netbooks for university students whereby up to 100,000 students will be provided with a netbook and broadband connection for a mere US$14.60 (RM50) a month for two years. The government's strong focus on Islamic banking will further spur this sector and result in more implementation of ICT.

The second factor was new applications, said Ang. There's the expected growth in online and mobile applications and usage. This, coupled with the rollout of broadband and HSBB [high speed broadband] and related services would rally the industry. Similarly, the launching of new applications such as the implementation of the petrol subsidy system will require ICT to enable it. Also, preparation work for the introduction of GST will also require investments in ICT.

Purchase cycle was the final factor, he said. We have also not discounted natural consumer spending behaviour which will express itself as pent-up demand for ICT products, especially for hardware. This augurs well for the industry and translates into a more positive outlook for our industry.


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