Indonesia - Telecommunications Infrastructure and Forecasts

Synopsis

Indonesia, with its distinctively challenging geographical character, has been working over a long period to put its telecom infrastructure in place. When the government launched its Joint Operating Service (KSO) strategy, it had high hopes that this would be the main driver for the development of the national fixed-line telephone network. The KSO program fell well short of expectations. The country has since made a fresh start on the building of its telecom infrastructure. Invigorated by the highly successful mobile segment on the back of increased competition in the marketplace, the country’s telecom industry has found a new dynamic. This report looks at progress in building infrastructure, in particular the development of the fixed-line network, and describes some of the changes, as the industry picks up momentum again.

Key developments:

Growth in the fixed-line market continues to be almost totally in fixed wireless subscribers, with the overall fixed-line segment growing a creditable 18% in 2010 and continuing in this fashion into 2011. Indosat’s efforts to be involved in the country’s fixed line market suffered a major setback in the first half of 2011 when its customer base fell by 50%. The government has licensed a consortium of seven Indonesian companies to build the US$1.5-billion 34,000 km Palapa Ring optical fibre cable network. PT Telkom announced plans in 2011 to launch the Telkom 3 satellite ‘before the end of the year.’

Companies covered in this report include:

PT Telkom; PT Indosat; Bakrie Telecom (BTEL); Qatar Telecom (QTel); Satelindo; SingTel; ThaiCom.

Table of Contents

• 1. Synopsis
• 2. National infrastructure
  • 2.1 Overview
  • 2.2 Background to development
  • 2.3 Fixed-line statistics
• 3. Forecasts – fixed-line market: 2015; 2020
  • 3.1 Infrastructure development
    • 3.1.1 Palapa Ring Project
  • 3.2 Joint operating service (KSO) ventures – five-zone plan
    • 3.2.1 The KSO strategy
    • 3.2.2 Difficulties with the KSOs
    • 3.2.3 Restructuring of KSOs
  • 3.3 Rural telephony
    • 3.3.1 Village Phone Program (VPP)
  • 3.4 Wireless Local Loop (WLL)
    • 3.4.1 PT Telkom
    • 3.4.2 PT Indosat
    • 3.4.3 Bakrie Telecom
  • 3.5 Telecom towers
• 4. International infrastructure
  • 4.1 International gateway exchanges
  • 4.2 Submarine cable networks
    • 4.2.1 SEA-ME-WE 4 cable
  • 4.3 Satellite networks
    • 4.3.1 Satellite communications
• 5. Notes on scenario forecasts
• 6. Related reports

• Table 1 – Fixed-line subscribers and teledensity – 1995 - 2012
• Table 2 – Fixed lines subscribers and annual change by operator – 2010
• Table 3 – Fixed wireless v. wireline subscribers – June 2011
• Table 4 – PT Telkom’s national network statistics and annual growth – 2007 - 2010
• Table 5 – Forecast of fixed line subscribers and penetration rates – 2015; 2020
• Table 6 – Five-year USO deployment of lines plan for villages – 2006 - 2010
• Table 7 – Fixed-wireless (WLL) subscribers – 2003; 2007 - 2011
• Table 8 – Fixed-wireless (WLL) subscribers by operator – June 2011
• Table 9 – PT Telkom’s fixed wireless subscribers – 2003 - 2010
• Table 10 – PT Telkom – fixed wireless subscribers – 2010

• Chart 1 - Fixed-line subscribers and teledensity – 1995 - 2012

• Exhibit 1 – Original consortia, and KSO operating in each geographical zone
• Exhibit 2 – Indonesian satellites – 2011