Information technology (IT) spending in Thailand will grow at a slower rate than GDP this year for the first time in five years, says Massachusetts-based research firm IDC.
Unfavourable economic conditions, a high level of household debt and weak consumer spending are the main factors in the sharp drop in IT spending.
"The IT industry is on pace to total 373 billion baht in 2015, a 2% increase from last year," said Jarit Sidhu, senior analyst at IDC Thailand.
The local IT sector saw its glory days in 2012 with 15.8% growth, dropping to 7.8% in 2013 and 3% in 2014.
But the rise of fourth-generation (4G) wireless broadband service is expected to boost the country's telecommunications spending next year, Mr Jarit said.
The third platform of computing -- comprising the cloud, social media, mobiles, big data and the Internet of Things -- is likely to become a growth engine for IT spending next year as businesses embrace new technologies.
"The IT industry is expected to grow by 3% to 384 billion baht in 2016, while GDP is forecast to grow 3.5% next year," Mr Jarit said. The third platform is killing traditional hardware and software.
Mr Jarit said the consumer segment would account for almost half of next year's IT spending (180 billion baht), followed by telecommunications (56 billion), finance (45 billion), manufacturing (31 billion), government (19 billion) and education (9 billion).
But consumer IT spending this year is expected to fall by 1% to 179 billion baht, the lowest in five years.
Telecom spending, meanwhile, will increase by 5% to 58 billion baht thanks to the forthcoming 4G service.
"We expect 2016 will generally be similar to 2013 -- major mobile operators migrating 2G subscribers to 3G networks," Mr Jarit said.
Smartphones will continue to drive IT market growth, generating 124 billion baht in sales this year and reaching 125 billion in 2016.
Sales of IT services and software will rise to 80 and 33 billion baht, respectively, this year from 72 and 30 billion last year.
Network equipment sales will be flat at 54 billion baht this year.
Mr Jarit expects the winning bidders of the 1800-MHz spectrum auctions will invest 50 billion baht each in 4G infrastructure and telecom towers next year. Sales of 4G smartphones are tipped to rival those of 3G models by mid-2017.
"The number of smartphone users in Thailand will increase to 50 million by 2017 from 25 million this year," Mr Jarit said.
IDC also announced its top 10 trends for the Thai IT industry in 2016 and beyond.
They are the Internet of Things and analytics; cloud-based computing services (accounting for 30% of IT infrastructure spending by 2018); technology disruption in business; smartphones; multifactor authentication for payments; smart multifunctional printers; big data; IT vendors disappearing by 2020; data-leak prevention systems; and the Internet of Things shaking the insurance sector by 2017, overtaking the banking sector in adoption of the technology.