SMBs in S'pore, India to spend US$1B on Net

Growth is driven by Singapore's need to support increasingly mobile workforce and India's intensifying dependence on the Internet, study finds.

Small and midsize businesses (SMBs) in Singapore and India will pour over US$1 billion in Internet access and telecommunication services this year, according to a new study from AMI-Partners.

In a report released Wednesday, the research firm said SMBs in Singapore with up to 999 employees, will increase their spending on such services by 3 percent to US$1.5 billion this year, over 2007. Mobile phones and long-distance telephony services will account for half of the overall investment, the study found.

Vu-Thanh Nguyen, AMI-Partners' research analyst who is based in Singapore, said SMBs in the island-state are expected to continue committing more investments in this area to support an increasing number of mobile and telecommuting employees. Growth is further boosted by the growing mobile computer ownership among SMBs, the local government's initiatives to spur the wireless broadband market, and the popularity of Internet-enabled mobile devices, Vu-Thanh said in a media statement.

Half of Singapore's small-sized businesses, with up to 99 employees, and 68 percent of medium-sized businesses have employees who are mobile and need to travel for their work.

Vu-Thanh noted: "Mobile employees make up between 10 percent and 50 percent of their workforce depending on the vertical segment.

"Consequently, there is an increasingly high penetration of notebooks among SMBs. Currently, there is one laptop for every three desktop PCs in a typical Singapore SMB [and] more PC-owning SMBs are migrating from desktops to notebook PCs," he said, adding that the move to mobile computers is steered by the ubiquity of Wi-Fi access across the city-state.

"One key catalyst is the growing popularity of Internet-enabled handheld devices," said Nguyen. "With the introduction of smart phones at cheaper prices, there will be a higher adoption of these devices by SMBs. With the wireless infrastructure in place, this will encourage the usage of more bandwidth-intensive applications like VoIP (voice over Internet Protocol) and videoconferencing."

Singapore's wireless infrastructure will help SMBs reduce their spending on long-distance telephony services, while at the same time, service providers can boost revenues through connection charges and new Web-based services such as enterprise e-mail and CRM (customer relationship management) systems, he said.

India's Web dependence
Indian SMBs, with up to 999 employees, are also following in the footsteps of their Singaporean counterparts, expanding their investments in Internet-related products and services by 35 percent to US$1.26 billion this year, over 2007.

According to a separate report from AMI-Partners, 50 percent of SMBs in the country perceive Internet enablement a necessity. Medium businesses with between 100 and 999 employees, now embrace the Web as a way of life, so much so that the Internet market has reached near-complete saturation point among these companies, the study determined.

There are still significant growth opportunities, however, in the small business segment where only 25 percent currently have Internet connection. The Web penetration rate among these enterprises is expected to increase by over 4 percent this year, the study projected.

Kalyan Banga, research analyst at AMI-Partners, said in a statement: "The Internet is a multi-faceted tool. It is both a facilitator for simple tasks, as well as a key differentiator among organizations that provides them with a competitive edge in this digital era."

"There is potential here for a rise in penetration of Internet-related technologies for small-sized business, and even for medium-sized businesses, in [areas such as] e-commerce and intranet," Banga said. "For example, the strategic technology adoption attitude of SMBs indicates that adding or enhancing e-commerce capabilities is a priority of almost 28 percent of SMBs in the next 12 months."

In addition, more than 50 percent of those surveyed regarded improvement in Internet speed as a must, and some 37 percent would like to completely revamp their Internet infrastructure, such as replacing or upgrading their Web access routers.

Banga added that Web 2.0 technologies such as social networking sites, blogs and podcasts, are also popular among Indian SMBs. In fact, 10 percent of SMBs said they use some form of social networking service, and another 30 percent were aware of this technology.

Some 45 percent said they depended on information sources such as vendor Web sites and search engines, to boost their awareness of IT products and services.