Indonesia - Telecoms, Mobile, Broadband and Forecasts

Publication Overview

This report provides a comprehensive overview of the trends and developments in the telecommunications and digital media markets in Indonesia. Subjects covered include:


  • Key statistics;
  • Scenario forecasts (fixed, mobile, internet subscribers)
  • Market and industry overviews;
  • Regulatory environment;
  • Major players (fixed and mobile);
  • Infrastructure development – national and international;
  • Digital media;
  • Mobile voice and data market;
  • Internet, including VoIP and IPTV;
  • Broadband services;
  • Regulatory environment.

Researcher:- Peter Evans
Current publication date:- August 2014 (20th Edition)

Executive Summary

Consolidation continues in Indonesia’s telecom market as customers embrace mobile broadband

After a period of uncertainty, the Indonesian telecom sector has settled into what looks like a healthy development phase. This country of around 250 million people presents a huge potential market; however, it must overcome some particularly big challenges if it is to successfully continue the building of the telecommunications infrastructure required to support a large population spread over what is a uniquely complex geography. Two of the more significant challenges are the crowded operator market, especially the mobile segment, and the slow rate of implementing regulatory decisions. At the same time, on a broader front, there is no avoiding the fact that Indonesia must also continue to deal with a range of social, political and economic issues that have proved problematic over the years.

The embracing of fixed-wireless technology, after an early stumbling start to building the country’s fixed-line network, provided a fresh basis for expansion. Wireless became the dominant component within the fixed market segment; by 2012 wireless services made up 75% of the total fixed-line subscriber base. Then in 2013 the fixed-line market segment suffered a major setback with a huge decline in the wireless subscriptions. In a short space of five years the wireless technology platform had transformed the fixed-line market in a positive fashion and then suffered a major setback.

Meanwhile, a strong mobile market (penetration of 122% in early 2014) was seeing a moderation in its growth rate. While the global financial crisis saw expansion in mobile subscriber numbers slow somewhat back in 2009, the market did not lose much momentum overall. In the four years to December 2013 the mobile subscriber base grew from 150 million to 300 million. As penetration passed the important 100% milestone, there was still considerable potential for further growth in the market. Consumer interest has started to shift to the 3G services being offered by the operators and take up of mobile data services is certainly on the rise, as evidenced by a significant surge in the sale of smartphones. At the same time it is noted that Indonesia is only moving slowly towards the introduction of 4G/LTE technology with both the government and the operators not appearing keen about it just yet.

Estimates for the number of internet users in Indonesia at the end of 2013 vary from 40 million to 55 million; in any case this represents a rapidly growing internet population. At the same time, the fixed internet subscription market was generally depressed with just three million subscribers reported by end-2013. Broadband subscriptions are certainly growing but from a low base. The expansion of mobile broadband in particular was compensating for the sluggish fixed broadband market and offering real promise for increased online activity as the uptake of new generation mobile services accelerates.

Data in this report is the latest available at the time of preparation and may not be for the current year

Table of Contents

  • 1. Key Statistics
  • 2. Telecommunications Market
    • 2.1 Overview
    • 2.2 Economy
    • 2.3 Background to development
    • 2.4 Market growth
      • 2.4.1 Mobile sector
      • 2.4.2 Fixed-line services
      • 2.4.3 Broadband
      • 2.4.4 Other
  • 3. Regulatory Environment
    • 3.1 Background
      • 3.1.1 Telecommunications Law 1989
      • 3.1.2 Telecommunications Law 2000
      • 3.1.3 Cross shareholdings
      • 3.1.4 Ministry of Communication and Informatics (MoCI)
    • 3.2 Corruption
    • 3.3 Regulatory developments
      • 3.3.1 SMS spam
      • 3.3.2 AT&T licence
      • 3.3.3 Control of the internet
      • 3.3.4 Price fixing
    • 3.4 Anti-monopoly case
    • 3.5 Privatisation process
      • 3.5.1 Background
      • 3.5.2 Foreign ownership
  • 4. Major Operators
    • 4.1 Overview
    • 4.2 Operator statistics
    • 4.3 PT Telkom Indonesia
      • 4.3.1 Overview
      • 4.3.2 PT Telkomsel / mobile operations
      • 4.3.3 Fixed-line operations
      • 4.3.4 IPTV
    • 4.4 PT Indosat
      • 4.4.1 Overview
      • 4.4.2 Business developments
      • 4.4.3 Financials
      • 4.4.4 Corporate structure
      • 4.4.5 Mobile operations
      • 4.4.6 Fixed-line operations
    • 4.5 XL Axiata (formerly PT Excelcomindo Pratama)
      • 4.5.1 Overview
      • 4.5.2 Axiata’s acquisition of Axis
      • 4.5.3 Operational statistics
      • 4.5.4 Financials
      • 4.5.5 Corporate structure
      • 4.5.6 Business and network strategies
    • 4.6 PT Sampoerna Telekomunikasi Indonesia (STI)
    • 4.7 PT SmartFren Telecom
      • 4.7.1 Overview
      • 4.7.2 Mobile-8
      • 4.7.3 Smart Telecom
    • 4.8 Axis (formerly Natrindo Telepon Selular)
      • 4.8.1 Overview
      • 4.8.2 Business developments including 3G
      • 4.8.3 Corporate structure
    • 4.9 PT Hutchison CP / 3 Indonesia
    • 4.10 PT Satelit Palapa Indonesia (SATELINDO)
    • 4.11 PT Bakrie Telecom
      • 4.11.1 Overview
      • 4.11.2 Financials
      • 4.11.3 Operational statistics
      • 4.11.4 Corporate structure
      • 4.11.5 Strategic development
  • 5. Telecommunications Infrastructure
    • 5.1 National infrastructure
      • 5.1.1 Overview
      • 5.1.2 Fixed-line statistics
      • 5.1.3 Infrastructure development
      • 5.1.4 Joint operating service (KSO) ventures – five-zone plan
      • 5.1.5 Rural telephony
      • 5.1.6 Wireless Local Loop (WLL)
      • 5.1.7 Telecom towers
    • 5.2 International infrastructure
      • 5.2.1 International gateway exchanges
      • 5.2.2 Submarine cable networks
      • 5.2.3 Satellite networks
  • 6. Internet Market
    • 6.1 Overview
    • 6.2 Background
      • 6.2.1 Market survey
    • 6.3 Internet statistics
    • 6.4 Social Networking
    • 6.5 Regulatory developments
      • 6.5.1 Indonesian Internet Agency (LII)
      • 6.5.2 Domain names
      • 6.5.3 Internet information control and the ‘cyber’ laws
    • 6.6 Internet infrastructure
      • 6.6.1 Telkom’s national IP backbone
    • 6.7 ISP market
    • 6.8 Voice over Internet Protocol (VoIP)
  • 7. Broadband Market
    • 7.1 Overview
      • 7.1.1 Broadband statistics
      • 7.1.2 Broadband market background
    • 7.2 Broadband service providers
      • 7.2.1 TelkomNet
      • 7.2.2 Indosat Mega Media (IM2)
      • 7.2.3 First Media
      • 7.2.4 MNC Kabel Mediacom
      • 7.2.5 Biznet/max3
    • 7.3 ID-WiBB
    • 7.4 Data centres
    • 7.5 Cloud services
    • 7.6 High-Speed Broadband (HSBB) project
      • 7.6.1 TITO (Trade In Trade Off) Access Modernization Project
    • 7.7 Wireless broadband
      • 7.7.1 Background
      • 7.7.2 WiFi hotspots
      • 7.7.3 WiMAX
      • 7.7.4 LTE / Fourth Generation (4G)
    • 7.8 Internet via satellite
  • 8. Digital Media / Digital Economy
    • 8.1 Digital Economy
      • 8.1.1 E-commerce
    • 8.2 Digital Media
      • 8.2.1 Broadcasting market
      • 8.2.2 Regulatory environment
      • 8.2.3 Free-to-Air (FTA) TV
      • 8.2.4 Cable and pay TV
      • 8.2.5 Satellite TV
      • 8.2.6 Internet Protocol TV (IPTV)
      • 8.2.7 Mobile TV
  • 9. Mobile Communications
    • 9.1 Overview of Indonesia’s mobile market
      • 9.1.1 Operational statistics
      • 9.1.2 Handset market
      • 9.1.3 Smartphones
    • 9.2 Background to development of the mobile market
      • 9.2.1 Overview
      • 9.2.2 Foreign ownership regulations
      • 9.2.3 Temasek and anti-monopoly ruling
    • 9.3 Mobile technologies
      • 9.3.1 GSM
      • 9.3.2 Code Division Multiple Access (CDMA)
    • 9.4 Third Generation (3G) mobile
      • 9.4.1 Background and initial licensing process
      • 9.4.2 Second 3G auction
      • 9.4.3 Launch of 3G services
      • 9.4.4 Expansion and marketing of 3G services
      • 9.4.5 Further auction of 3G spectrum
    • 9.5 4G / Long Term Evolution (LTE) services
    • 9.6 Mobile voice services
      • 9.6.1 Prepaid
      • 9.6.2 Satellite mobile
    • 9.7 Mobile data services
      • 9.7.1 Short Message Service (SMS)
      • 9.7.2 KakaoTalk
      • 9.7.3 Mobile TV
      • 9.7.4 Blackberry
      • 9.7.5 Mobile advertising
      • 9.7.6 Mobile banking / payment
      • 9.7.7 Village Phone Program (VPP)
  • 10. Forecasts
    • 10.1 Forecasts – fixed-line market: 2015; 2020
    • 10.2 Forecasts – internet services – 2015; 2020
    • 10.3 Forecasts – mobile market: 2015; 2020
    • Table 1 – Country statistics – 2014
    • Table 2 – Telephone network statistics – 2013
    • Table 3 – Internet user statistics – 2013
    • Table 4 – Broadband statistics – 2013
    • Table 5 – Mobile statistics – 2013
    • Table 6 – National telecommunications authorities
    • Table 7 – Indonesia’s real GDP growth rate – 2006 - 2015
    • Table 8 – Major mobile operators and subscribers – 2013
    • Table 9 – Mobile subscribers and market share by operator – 2012
    • Table 10 – Mobile subscribers and market share by operator – 2013
    • Table 11 – 3G mobile subscribers and market share by operator – March 2013
    • Table 12 – Major fixed-line operators - subscribers – 2010 - 2013
    • Table 13 – Fixed lines subscribers and annual change by operator – 2013
    • Table 14 – PT Telkom’s subscribers by segment – 2013
    • Table 15 – PT Telkom’s capital expenditure (capex) – 2008 - 2014
    • Table 16 – PT Telkom – revenue contribution by market segment – 2012
    • Table 17 – PT Telkom – revenue contribution by market segment – 2013
    • Table 18 – Telkomsel mobile subscribers – postpaid, prepaid and market share – 1999 - 2014
    • Table 19 – Telkomsel: 3G subscribers – 2012 – 2013
    • Table 20 – Telkomsel’s mobile broadband subscribers – 2011 - 2013
    • Table 21 – Telkomsel subscribers – postpaid and prepaid – 2001 - 2013
    • Table 22 – Telkomsel prepaid subscribers as proportion of total – 2002; 2004; 2009 - 2013
    • Table 23 – PT Telkom’s total fixed-line subscribers – 2004 - 2013
    • Table 24 – PT Telkom: - fixed lines in service – wireline v. wireless - 2009 - 2013
    • Table 25 – PT Telkom – postpaid and prepaid fixed wireless subscribers – 2012
    • Table 26 – PT Telekom – fixed wireless pre and postpaid ARPU – 2004 – 2013
    • Table 27 – PT Telkom – fixed wireless subscribers – 2003 – 2013
    • Table 28 – PT Indosat – revenue and contribution by market segment – 2012
    • Table 29 – PT Indosat – revenue and contribution by market segment – 2013
    • Table 30 – PT Indosat – revenue contribution by market segment – 2010 - 2013
    • Table 31 – PT Indosat mobile subscribers – 2005 - 2014
    • Table 32 – PT Indosat postpaid and prepaid mobile subscribers – 2013
    • Table 33 – PT Indosat postpaid and prepaid mobile ARPU – 2011 - 2013
    • Table 34 – PT Indosat: 3G subscribers – 2012 - 2013
    • Table 35 – PT Indosat – fixed wireless subscribers – 2006 - 2013
    • Table 36 – PT Indosat – fixed wireless - prepaid and postpaid ARPU – 2006 - 2013
    • Table 37 – XL Axiata mobile subscribers – 2005 - 2014
    • Table 38 – XL Axiata: 3G subscribers – 2012 – 2013
    • Table 39 – XL Axiata: blended ARPU – 2012 – 2013
    • Table 40 – PT Sampoerna (STI) subscribers – 2007 - 2009
    • Table 41 – SmartFren subscribers – 2010 - 2014
    • Table 42 – Historical - Mobile-8 subscribers – 2004 - 2011
    • Table 43 – Historical - Smart Telecom subscribers – 2007 - 2011
    • Table 44 – Axis Indonesia mobile subscribers – 2008 - 2013
    • Table 45 – Axis Indonesia: 3G subscribers – 2012 - 2013
    • Table 46 – 3 Indonesia subscribers – 2007 - 2013
    • Table 47 – 3 Indonesia: 3G subscribers – 2012 – 2013
    • Table 48 – Bakrie Telecom subscribers – 2004 - 2014
    • Table 49 – Bakrie Telecom – postpaid and prepaid fixed wireless subscribers – 2010 - 2013
    • Table 50 – Bakrie Telecom - subscribers – voice v. data – 2013
    • Table 51 – Bakrie Telecom’s pre and postpaid ARPU – 2004 - 2013
    • Table 52 – Fixed-line subscribers, annual change and teledensity – 1995 - 2014
    • Table 53 – Fixed lines subscribers and annual change by operator – March 2013
    • Table 54 – Fixed lines subscribers and annual change by operator – 2013
    • Table 55 – Fixed wireless v. wireline subscribers – March 2013
    • Table 56 – Planned five-year USO deployment of lines for villages – 2006 - 2010
    • Table 57 – Fixed-wireless (WLL) subscribers – 2003; 2007 - 2013
    • Table 58 – Fixed-wireless (WLL) subscribers by operator – 2013
    • Table 59 – PT Telkom’s fixed wireless subscribers – 2003 - 2013
    • Table 60 – PT Telkom fixed-line wireless subscribers - prepaid v. postpaid – 2012
    • Table 61 – PT Telkom fixed-line subscribers - wireless v. wireline – 2013
    • Table 62 – Internet users – 1998 - 2014
    • Table 63 – Fixed internet subscribers – 1998 - 2013
    • Table 64 – Dial-up internet subscribers – 2004 - 2013
    • Table 65 – Total international internet bandwidth – 1998 - 2014
    • Table 66 – Households with internet access – 2005 - 2014
    • Table 67 – Domain name registrations – June 2010
    • Table 68 – Internet licences by licence type – 2007
    • Table 69 – Historical - TelkomNet’s dial-up internet subscribers – 2004 - 2011
    • Table 70 – Historical - IndosatNet’s dial-up internet subscribers – 2010 - 2011
    • Table 71 – Fixed broadband subscribers – 2000 - 2014
    • Table 72 – DSL subscribers – 2001 - 2013
    • Table 73 – Fixed broadband - subscribers and households - 2013
    • Table 74 – Mobile broadband subscribers – 2009 - 2014
    • Table 75 – PT Telkom’s fixed broadband subscribers – 2004 - 2014
    • Table 76 – PT Telkom’s mobile broadband subscribers – 2011 - 2013
    • Table 77 – Key broadcasting statistics – 2013
    • Table 78 – Broadcasting sector, TV households and home satellites – 1997 - 2013
    • Table 79 – Television audience share by operator – 2012
    • Table 80 – Pay TV subscribers – cable and satellite – 2001 - 2011
    • Table 81 – TelkomVision subscribers – 2007 - 2013
    • Table 82 – Mobile subscribers – 1995 - 2014
    • Table 83 –Total 3G mobile subscribers – 2009; 2012 - 2013
    • Table 84 – 3G mobile operators and subscribers – March 2013
    • Table 85 – Prepaid subscribers – selected mobile operators –2012
    • Table 86 – Forecast of fixed line subscribers and penetration rates – 2015; 2020
    • Table 87 – Forecast of fixed broadband subscribers and penetration rates – 2015; 2020
    • Table 88 – Forecast of mobile subscribers and penetration rates – 2015; 2020
    • Chart 1 – Mobile subscribers and market share by operator – 2012
    • Chart 2 - Mobile subscribers and market share by operator - March 2013
    • Chart 3 - 3G mobile subscribers and market share by operator - March 2013
    • Chart 4 - PT Telkom - revenue contribution by market segment - March 2013
    • Chart 5 - Telkomsel mobile subscribers and market share - 2005 – 2014
    • Chart 6 - PT Telkom’s total fixed line subscribers and annual change - 2005 – 2013
    • Chart 7 - Fixed-line subscribers and teledensity – 2005 - 2014
    • Chart 8 - Internet users and penetration - 2005 – 2014
    • Chart 9 - Fixed broadband subscribers and penetration - 2005 - 2014
    • Chart 10 - Pay TV subscribers - cable and satellite - 2001 – 2011
    • Chart 11 - Mobile subscribers and penetration – 2005 - 2014
    • Exhibit 1 – Major shareholder categories in PT Telkom – December 2013
    • Exhibit 2 – Major shareholders in PT Indosat – December 2013
    • Exhibit 3 – Palapa Ring Project – specification of rings
    • Exhibit 4 – Indonesian satellites – 2013
    • Exhibit 5 – Major FTA television broadcasters, ownership, launch date and coverage

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