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NEWS UPDATES Asean Affairs                     30  September 2011

Cambodian IT sector to grow

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Cambodia's information technology sector is looking to expand its current capacities in the next decade as the country chases other countries in the region, industry experts say.

As much as 40 percent of the country could be online within 10 years, Dell general manager of Indochina Ano-thai Wettayakorn said last week.

World Bank figures show about 0.5 percent of Cambodians, or 78,000 people, used the Internet in 2009, the most recent year for which data is available.

Industry insiders have confirmed that number, saying it is still below one percent.

An increasingly young demographic, coupled with rising income and a previous dearth of investment in the sector would carry Cambodia's information-technology industry toward regional standards on par with Thailand and Vietnam, Anothai said.

"With its past history, the country was not ready to move on to the IT industry as soon as other countries. But now they are leapfrogging because they don't need to start from the [basics]," he said after a forum on cloud computing held at the Sofitel Hotel.

"This means they can grow faster than the others. The headroom is very big."

About 26 percent of Vietnamese were online in 2009, according to the World Bank, whose data showed 25 percent of Thais used the Internet in that year.

Anothai said the 40 percent of Cambodia's workforce that will be below the age of 25 in 2021 would account for Cambodia's Internet penetration at that time.

This demographic would fuel the consumer end of the IT industry, as ever more popular smartphones and handheld devices drove internet proliferation, he said.

"This generation is growing up with the technology. They will be the ones who use it day in and day out."

Although sales of computers and smart devices were still limited, consumers once financially excluded from the market were showing interest in new products, Microsoft country manager Pily Wong said yesterday.

"Life is improving in Cambodia. I see more and more people buying iPhones, and students with enough money to buy their own computers," he said. Although 40 percent internet penetration within 10 years was "optimistic but possible", the outcome would depend largely on the government's attitude to the IT industry, Wong said.

The government's increasing demand for technological sophistication would also be a big driver of IT investment, and improved technology in the government could push efficiency and transparency, he said.

A reduction in import duties could substantially drop the cost of IT products and services, Dell's Anothai said.

Recent dialogue between the government and the US-ASEAN Business Council, in which Dell participated, had revealed plans to drop import tariffs from the current 15 percent to less than five percent, he said.

"That makes the barrier of entry to technologies lower, so we can bridge the digital gap between rich and poor people in the near future.''

A substantial gap in spending still existed between urban and rural Cambodia, Pheang Sokveasna, project manager at the Cambodian IT firm PCSP Group, said yesterday.

Device purchases would grow, but only slowly, with the vast majority of consumers in urban areas, he said.

Figures for Internet users had "doubled and tripled" in the past few years, but solid projections for long-term growth were difficult to make, Pheang Sokveasna said.



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