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India to spend 16.7 B on telecom: Gartner
By siliconindia News Bureau and IANS
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Tuesday, 07 December 2004, 20:30 IST
BANGALORE: In a series of regional forecasts focusing on hot trends for 2005 and beyond, Gartner, the leading research and analyst firm, predicts that the coming few years will present some of the greatest challenges and opportunities of their careers to CIO's and those responsible for IT planning and operations.
"Enterprise spending on information communications and technology (ICT) in India is expected to grow at 16.6 percent to US$22.88bn as compared to Asia Pacific growth at 7.6 per cent in 2005," said Sujay Chohan, VP & Research Director, Gartner India. "For vendors the stakes couldn't be higher; especially local vendors, who have long ignored the local market, cannot afford to miss this transition.
"The future is very exciting and in just five years, the IT industry will have little resemblance to that of today, yielding extraordinary benefits with network security, convergence, IP telephony, software as services and instant messaging all maturing within 36 months".
"Utility computing and wireless LANs will also become more established while we will begin to experience the value of RFID tags, grid computing, web conferencing and real-time infrastructure during the next three years."
Enterprise spending in APAC on hardware next year will rise 6.3 per cent to US$36.9bn, with software increasing 12.4 per cent to US$5.6bn while telecom will grow 7.5 per cent to US$132.5bn and IT services will gain 8.4 per cent to US$33.6bn.
In India, of the US$22.88bn spend in 2005 on enterprise ICT, US$3.34bn is the projected spend on hardware, an increase of 21.1 per cent over 2004; US$0.52bn (16.4 per cent increase) on software; US$16.7bn (15.5 per cent increase) on telecom and US$2.32bn (18.3 per cent increase) on IT Services.
According to Gartner, India will remain the highest growth market for telecommunications with around 35 million new subscribers in 2005, an 18 percent increase from 2004, with the growth occurring in selected technologies mainly mobile. This accounts for almost one fourth of the new subscribers forecasted in Asia Pacific.
Consumer segment is rapidly gaining importance, driven by adoption of mobile services. This is reflected in their increased contribution towards spending for telecommunication services, from 35% in 2002 to 43% in 2005. By 2008 the consumer segment will account for more than half of telecommunications spending.
Gartner also said that Open Source and offshore IT services will continue to grow, while it warned global IT vendors to take emerging competition from China seriously with at least three Chinese IT companies becoming significant global competitors by 2010.
"With confidence growing in government circles about the capabilities of open source software, along with the increasing numbers of announcements about open source initiatives, we believe 60 per cent of large and mid-size government agencies in Asia Pacific will use open source software for applications in their core business processes by 2010. That compares with less than 15 per cent today," said Chohan.
According to Gartner, the hype of offshore IT services is real and reflects a dramatic uptake in global sourcing of these services. When compared with the total IT services market, less than 3 percent of spending (US $606 billion) is attributable to sourced services in 2004. By 2007, the globally sourced component of IT services spending will be about US $50 billion, or 7 percent of the US $728 billion total.
The growth in Offshore BPO services outpaces the growth in global sourcing of IT services. Offshore component of global BPO services spend is expected to grow from US $3 billion (2.4 percent of total market spend of US $124 billion in 2004) to US $24 billion (15 percent of the total market spend of US $161 billion in 2007).