Wanted: Supercorridor

ASIA FOCUS

Wanted: Supercorridor

Government needs to do more to put Thailand on world IT map

UMESH PANDEY

Satyam Computer Services, one of the world's largest software outsourcing companies, says it sees a brighter future for Thailand's information technology industry although the country will likely have to take more steps to become a regional powerhouse.

"The ICT industry in Thailand is still in its nascent stage. However, the continuous effort from the government in improving the education, infrastructure and overall business environment is encouraging more companies to make investments in Thailand and gradually will emerge as a low-cost alternative to its Asean neighbours," said Virender Aggarwal, a director and senor vice-president for Satyam in Asia Pacific and the Middle East.

Satyam, which started out in Thailand with a small office just two years ago, today has 120 staff servicing some of the country's leading corporations.

The company believes that Thailand's IT industry needs to be marketed well in the international arena.

One helpful step would be the creation of a multimedia supercorridor such as the one developed by Malaysia.

"Thailand has still a long way to go in terms of branding its IT initiative and having a consistent policy that is well marketed and branded," said Mr Aggarwal.

"Thailand, given its population, certainly has much larger number of people than Malaysia who can serve in the IT industry, and given the experience of Reuters and Exxon Mobil, it is quite evident that companies can scale up to a sizeable number and do high-end work at fairly competitive costs."

Reuters, the international news and business information provider, over the past few years has built a massive IT operation in Thailand consisting of more than 1,200 software engineers.

Satyam, which recently said it was establishing a 2,000-seat software engineering global delivery campus (GDC) near Kuala Lumpur, said such moves required a lot of input from the government.

"Strong governmental support, a young talent pool, continued investment in world-class infrastructure. ... Malaysia has a clearly articulated policy framework for attracting IT and business process outsourcing (BPO) industry and the policy has been very consistent over the years and has resulted in good success for the Malaysian government," he said.

Satyam which counts 157 of the Fortune 500 companies as its clients, says that infrastructure such as a multimedia supercorridor is necessary for companies in the IT sector to think about when they are looking to invest in a country.

Malaysia also offers benefits such as 10-year tax holidays, the hiring of unlimited number of expatriates with work permits, and operations done through a single window through its Multimedia Development Corporation (MDEC).

"Apart from that, the Malaysian government customises benefits for every company depending on the scale of operation and the no of local jobs created the visibility of the company on a global scale," Mr Aggarwal says when asked why Satyam built its largest GDC outside its home turf in Malaysia.

New York-listed Satyam says it is interested in expanding in Thailand but the new government needs to make some policy changes.

Other Indian IT companies such as Tata Consultancy Service (TCS), Wipro and Infosys are all keen on expanding in Thailand, especially to cater to the growing client base of the booming automotive sector in Thailand.

"Thailand will act as the 'Detroit of Asia' for our automotive clients globally ... and are very keen on expanding there," Mr Aggarwal says.

"However, the present IT framework and policies need to be looked at again and worked upon specifically to make it attractive for companies such as Satyam to be able to operate in Thailand."

The new government, he added, should formulate policies such as Malaysia has done, allowing free movement of expats without any restriction on a corresponding number of Thais being hired, and also cover the costs of training Thai nationals in IT and English skills to make them ready to do offshore work for multinational clients.

As well, similar tax benefits to Malaysia's and a well-connected software park would be helpful.

These steps could benefit Thailand as the country is gradually signing free trade agreements with various countries.

Despite all this, Mr Aggarwal, who has been instrumental in building Satyam's regional operation and making it one of the key components of the $1-billion plus revenues of the company, says there's huge potential in the Thai market.

"The IT services market in Thailand is highly driven by the movements in the financial services, government, manufacturing and communication sectors," he said.

"We foresee further growth in the emerging industries such as health care and manufacturing that will fuel growth in the economy as they develop their infrastructure and first-generation business solutions that are needed for day-to-day operations."

General News
Bangkok Post
Saturday January 20, 2007