Its per-capita public sector IT expenditure--currently at US$7.41--is also expected to be one of the fastest growing in the region, according to a report released by Springboard Research last week.
According to Kraisorn, software development is a key industry for Thailand and is forecasted to be the fastest-growing ICT market expanding at a compound annual growth rate (CAGR) of 23 percent between 2005 and 2008.
He added that the Thai government is hoping to invite Indian software companies to invest in the country, so that the technology know-how can be transferred to the locals.
The communications market, which is expected to grow at a CAGR of 22 percent between 2005 and 2008, is another area to watch out for in Thailand. Kraisorn noted that the level of broadband penetration in the country is a key success indicator of how far Thailand is from achieving its goal of becoming an ICT hub.
His ministry is looking to increase the number of broadband subscribers in Thailand from 6 million or 7 million--about 10 percent of its population of 62 million--by 2008, a ten-fold increase over the current 1 percent penetration rate. Before 2002, there were some 20,000 broadband subscribers.
For that to happen, IDC's Ng pointed out that the "price [of broadband subscription] has to drop very low". The government would also "have to provide a lot of incentives" for service providers to reduce their rates.
According to Kraisorn, the MICT has helped make broadband charges more affordable, bringing it down to about US$25 for access speeds of 1Mbps (megabits per second) from US$500 four years ago.
The Thai government also intends to increase the number of Internet service providers and improve infrastructure to spur broadband uptake, he said.
The first 3G license is also expected to be issued next year, creating more momentum in the communications industry, said Kraisorn. There are currently around 31 million mobile users in Thailand.
IDC's Ng also observed that the telecoms industry is becoming more open. Discussions with telcos in recent months had impressed upon her that the companies were "not laid back and pretty forward looking", which augured well for the industry, she added.
In addition, Aidan Lawes, CEO of itSMF, noted that the recent formation of a Thai chapter of the IT Service Management Forum (itSMF) may help boost the level of professionalism in Thailand's ICT industry. The forum is an independent non-profit organization that aims to drive IT service management standards and best practices with 33 chapters worldwide, including Australia, Hong Kong, India, Singapore and the United Kingdom. The Thai chapter, according to Lawes, is expected to be launched later this year.
Shift in strategy needed?
Springboard Research's Perrine added that Thailand may wish to avoid having a broad goal of being an ICT hub, and focus instead on areas where it has experience and can compete effectively.
"A more niche strategy can help Thailand overcome its infrastructure and language challenges," he noted. "By leveraging areas that Thailand is strong in like agriculture, manufacturing [and] especially automobiles, tourism…and applying specific technology solutions and strategies to these areas, Thailand can probably foster more investment and greater gains than going with a broad strategy to become a hub."
"This strategy could also allow the country to compete long-term with Vietnam--an up and coming country that has many of the same challenges that Thailand has, but has the advantage of [offering] even lower costs," explained Perrine.
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