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ISPs cutting back on investments: IDC study

12-March-2001
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ISPs cutting back on investments: IDC study

Internet service providers in India have reduced investments in the last six months by about 25 per cent, adopting a wait-and-watch policy to see what effect the slowdown in the US economy has on India, says a study conducted by IDC. The study also pointed out that Indian ISPs have overspent on setting up infrastructure like gateways and a fibre optic network.

Listing out IDC’s 10 predictions for 2001 for the IT and communications market in Southeast Asia, Sandra Ng, vice-president, communications & peripherals, IDC, said that the IT markets will witness a slowdown in Korea and India with Internet stocks unable to stage a comeback.

IDC has predicted that mobile commerce and Internet connectivity will reach hysteria levels with 119 million mobile users carrying out impulse purchase decisions. IDC also predicts that by 2004 mobile phones could double Asia’s Internet population from the current 65 million to 130 million users. Installed base of PCs will also go up from 70 million to 140 million by 2004 and mobile users will increase from 145 million to 280 million by 2004.

The application service providers market will also gain acceptance, with the market touching the $50 million mark. In India, the ASP market is growing at the rate of 70 per cent and will contribute to 12 per cent of the total revenues from packaged applications in 2004.

As compared to this, China’s ASP market is growing at an average of 200 per cent while ASEAN countries are growing at 110 per cent. ASP companies will gain acceptance as they will be offering value-added services like co-location, co-hosting and data centres. New applications like CRM and knowledge management will also be provided on an ASP platform.

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