Opportunities for Telecoms Market in Hong Kong

More small and medium-sized enterprises plan to invest in VPN (Virtual Private Network) solutions in the next 12 months than in the past year. These findings are the latest results from the TNS ICT Panel that interviewed 185 senior business and IT decision makers in Hong Kong in November 2002.

37 per cent of small businesses (1 to 49 employees) say they intend to invest in VPN solutions in the coming 12 months, compared to 22 per cent who have invested in the last 12 months, representing a growth of 68 per cent.

And similar growth is found among medium-sized businesses (50 to 199 employees), with 37 per cent planning investment in the coming 12 months, compared to 26 per cent who invested over the last 12 months; a growth of 42 per cent.

The findings also show that growth in VPN spending is unlikely to come from the larger companies (200 or more employees). The percentage of large companies who plan to invest in VPN solutions in the coming year is the same as those who invested over the past year - a static 56 per cent.

Furthermore, the average amount of money invested in VPN solutions by large companies is not expected to grow in the next 12 months.

Because VPN uses a more efficient means of sharing bandwidth, it offers businesses a cost effective and secure method of connecting networks of branch offices, or letting staff access their business files, email or databases when they are not in the office. Businesses can invest in VPN solutions by purchasing network equipment and connecting it to the Internet, or by subscribing to hosted VPN services from telecommunication service providers.

The survey findings show that service providers are taking a large portion of companies' VPN investments, overall 52 per cent of planned VPN investments will go to this group. The top three service providers that companies with a budget for VPN investments are considering working with are PCCW, CPC Net, and Hutchison Global Crossing. Other service providers were also mentioned, but by less than 10 per cent of companies.

Marc de Lange, ICT Research Consultant with TNS said: 'The findings show that adoption of VPN technology among large corporates is already substantial, but that in coming years the growth will come from smaller companies investing in VPN technology for the first time. Hong Kong's businesses put local service providers at the top of their list. These service providers look well positioned to capture the expected growth among SMEs. And we don't see international service providers being considered by many of Hong Kong's businesses. The international service providers are currently targeting the corporate market which is stable but not expected to grow in the next 12 months.'

The ICT (Information Communication Technology) Panel is the latest market intelligence solution launched by TNS in Hong Kong in June 2002. This is the first business to business online panel launched in Asia Pacific. The ICT Panel contains 1,000 ICT decision-makers, who are Senior Business Executives such as CEO, CFO, MD, etc. and Senior IT Executives such as CTO, IT Director, etc.

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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