The mobile market in Indonesia has experienced an exceptional run of boom years. At the same time the mobile operators have been busily positioning themselves as growth rates start to moderate and competition becomes more intense. Market leader Telkomsel continues to maintain a huge presence despite the increased pressure from the competition. It still claims around 45% of the total subscriber base. To expand their respective customer bases and build market share, all the operators must offer competitive prices. The shape of the market has certainly undergone change since a number of newer operators, with foreign partners, entered the market. With 3G services having been launched following a somewhat controversial licensing phase, there has been much interest in how the operators manage the next generation challenge. Although fixed-line services have been very much playing a secondary role compared with mobile services, the expansion of fixed-wireless networks was a very significant move that at least kept the fixed segment relevant in the marketplace for some longer period. By 2015, however, fixed service operators were facing a serious decline in subscribers. The earlier restructuring of the big telcos and ongoing privatisation push initially delivered a positive overall outcome for the industry. There was still further rationalisation needed, however, and this has been happening over the last few years. Smart Telecom was acquired by Mobile 8 in 2011 to form a new operator called SmartFren. In 2013/2014 there was a particularly important acquisition by XL Axiata of the smaller mobile rival Axis Telecom.
This report looks at the major operators in Indonesia’s telecommunications market.
- Market leader Telkomsel was continuing to dominate the mobile market, with its mobile subscriber base of around 45% market share;
- PT Telkom saw fixed-line subscriber numbers drop dramatically in 2013/2014;
- SmartFren, after expanding its mobile subscriber base by over 40% in 2012, was continuing to grow, but much more modestly;
- PT Indosat, battling with Axiata for second place in the mobile market well behind Telkomsel, saw strong growth in 2014 to put it firmly in second place;
- At the same time, PT Indosat continued to lose fixed-line subscribers, placing it well behind both Telkom and Bakrie in this market;
- Bakrie Telecom’s financial position remained a problem despite managing to grow its subscriber numbers;
- Having acquired rival operator Axis, by early 2015 Axiata had adopted a dual-brand strategy, promoting both XL and Axis equally;
- Telkomsel launched LTE commercially in December 2014, becoming the first mobile operator in Indonesia to enter the 4G market;
- Later in December 2014 XL Axiata also launched its 4G LTE network in three cities;
- Indosat was assigned a 4G concession in early 2015 allowing it to use frequencies of 800MHz, 900MHz and 1800MHz.
Companies mentioned in this report include:
PT Telkom; PT Telkomsel; PT Indosat; PT Satelindo; IM3 Indosat; Bakrie Telecom (BTEL). Qatar Telecom (QTel); XL Axiata; PT Hutchison CP; SmartFren; Mobile 8; Smart Telecom; PT Natrindo Telepon Selular (NTS); SingTel; Temasek; Qtel; Bolt/Internux.