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ASIA 2020-Asia future set on information technolog
Reuters Story - November 17, 1997 01:27
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By Christina Toh-Pantin
KUALA LUMPUR, Nov 17 (Reuters) - When Malaysia recently
deferred some $20 billion in mega-projects at the height of an
economic crisis, its leaders were quick to tell the world that
information technology investments would forge ahead.
Technology and telecommunications, once seen as Western
imports to a development-starved Asia, will be basic building
blocks for a region looking to maintain its economic drive into
the year 2020, analysts and industry experts said.
"They're not luxuries anymore," said Amala Menon,
telecommunications analyst for U.S.-based research firm
International Data Corp (IDC) in Singapore.
"Every business needs them, and they are the basic
foundation for developing in any area."
Figures predicting growth of telecommunications and
technology in Asia over the next 23 years are difficult to come
by, analysts said.
But for just the next decade, they said Asia was expected to
spend some $1.53 trillion on telecommunications.
"China and India will see tremendous growth (in
telecommunications), and it will be in the wireless sections,"
said Stefan Sieber, general manager for Asia Pacific at
telecommunications solutions firm L.H.S. Asia Pacific Sdn Bhd.
But the number of telecommunications firms in each country
could be winnowed down by consolidations in the next two
decades, he said. "Each market could have four strong players."
Technology expenditure varies widely from country to
country, but analysts said Malaysia and Singapore have earmarked
substantial funds for the sector to stay ahead of the pack.
Tiny city-state Singapore, already a key hub for electronics
production, is pouring about $52 million into infrastructure for
its Singapore ONE (One Network for Everyone) nationwide
multimedia, broadband network that it expects to connect the
entire island of three million people.
The network, part of Singapore's year 2000 information
technology masterplan, is expected to offer a variety of
services including online shopping, entertainment and education.
Malaysia has made no secret of its own information
technology (IT) ambitions, aggressively promoting its testbed
for multimedia applications, the Multimedia Super Corridor
(MSC), to the world's biggest computer companies.
Despite a currency crisis which has reduced per capita
incomes, lowered economic growth prospects and shelved less
productive projects, Malaysia has said it is putting $10 billion
worth of infrastructure, including a high-speed
telecommunications backbone, into the zone.
"...this (MSC) is one of our few tickets to the future,"
Muhamed Arif Nun, chief operating officer at Multimedia
Development Corp Bhd which oversees the project, told a global
economic panel in November.
Although Malaysia's high-tech vision and its hopes for
futuristic applications may seem fuzzy, analysts said its
expectations of a convergence in technology and
telecommunications are right on the money.
"To a large extent, investments are predicated on the
convergence of content," said an Australia-based mergers and
acquisition specialist. "The impact of technology is changing
the historical portfolio of services."
Thus, residents at some condominiums in Malaysia's capital
can order cable television service through a phone company which
has wired the building with fibre optic cables. Both traditional
phone services and movies are piped through the cables.
For technology, analysts said the trend within Asia could
move towards the personal computer as a cheaper, commonly
available product.
"Malaysia, Singapore and Hong Kong will probably lead the
way as far as futuristic technology into the next millennium,
but I wouldn't count out very strong IT investments in China,"
said Brian Kornegay, a senior personal computer analyst at IDC.
Production of computers from Asia, excluding Japan, are
expected to continue at a robust pace, the IDC projects.
Desktops, portables and PC server unit shipments are seen
rising by a 20.8 percent compounded annual rate from 1996 to
2001.
Asian countries with significant high-technology production
include Taiwan, Japan, South Korea, Singapore and Malaysia.
While the currency-inspired rout has forced bailouts of the
economies of Thailand and Indonesia, and threatened the
prospects of other economies in Southeast Asia, any impact on IT
investments should be temporary, industry officials said.
"Asia-Pacific is a region to invest in, and we will stick to
our guns," said A. Baan, chief operating officer at Dutch-based
Philips Business Electronics.
As competition gets more intense in the IT sector, Asian
electronics makers will have to evolve from anonymous low-cost
producers of components to innovators, analysts said.
"The next challenge for the next two decades is how Asia
(electronics firms) can develop a face and a brand name," said
Bernard Tan, Merrill Lynch electronics analyst for Southeast
Asia.
Few have made that leap, he said, pointing to
highly-recognised Singapore-based soundcard maker Creative
Technology Ltd as an example.
But there is already a sense that Asia is rapidly ascending
the ladder, industry executives said.
"We often took prospective customers (to see
telecommunications systems) mainly to North America and Europe,"
said David King, Asia Pacific marketing executive for Canadian
networking products firm Newbridge Networks Ltd .
But now, "we're taking them to Asia," he said.
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