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:- July 2013 (19th Edition)

Executive Summary

Indonesia’s crowded mobile market continues rush to 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 245 million people presents a huge potential market; however, it faces some particularly big challenges that need to be confronted 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 has now become the dominant component within the fixed market segment; by 2012 wireless services made up 75% of the total fixed-line subscriber base. The introduction of fixed wireless has also seen a major upturn in fixed subscriber numbers with teledensity reaching 16% early in 2013. Wireless technology has not only boosted the growth rate in the last few years; it has provided much-needed basic telephone services to previously unserved communities. In a short space of five years this technology platform had transformed the fixed-line market in a positive fashion.

Meanwhile, a strong mobile market (penetration of 117% in early 2013) was seeing a possible 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 three years to December 2012 the mobile subscriber base grew from 150 million to 280 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.

The number of internet users in Indonesia was estimated at 54 million by early 2013, representing a rapidly growing population penetration of 22%. At the same time, the fixed internet subscription market was generally depressed with just 5.5 million subscribers reported by end-2012. Broadband subscriptions are certainly growing but from a low base. The expansion of mobile broadband in particular was offering real promise to the internet market as uptake of new generation services accelerates.

Market highlights:

  • Indonesia’s mobile market passed 285 million subscribers by March 2013 with penetration running at just over 117%;
  • After years of strong growth, the annual increase in mobile subscribers had moderated somewhat by 2013 to somewhere around 10%;
  • The 3G market had got off to a slow start, but by 2012 there were sign of a surge in growth, with sales of smartphones jumping sharply;
  • Internet user penetration was starting to grow (estimated  22% user penetration by end-2012);
  •  Internet subscription rates were on the increase, boosted by strong uptake of mobile broadband;
  • Construction of the US$1.5 billion Palapa Ring optical fibre cable project was continuing.
  • The launch of PT Telkom’s Telkom 3 satellite in August 2012 was a failure; PT Telkom was looking for a new partner in the Telkom 3 satellite project. 

Indonesia: - key telecom parameters – 2011 - 2013

Category

2011

2012

2013 (e)

Fixed-line services:

 

 

 

Total No. of subscribers

38.6 million

38.6 million

41.0 million

Internet services:

 

 

 

Total No. of fixed internet subscribers

4.5 million

5.5 million

6.5 million

Mobile services:

 

 

 

Total No. of subscribers

259 million

284 million

307 million

(Source: BuddeComm)

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
    • 4.4 PT Indosat
      • 4.4.1 Overview
      • 4.4.2 Alleged misuse of spectrum
      • 4.4.3 Mobile operations
      • 4.4.4 Fixed-line operations
    • 4.5 XL Axiata (formerly PT Excelcomindo Pratama)
      • 4.5.1 Overview
      • 4.5.2 Operational statistics
      • 4.5.3 Financials
      • 4.5.4 Corporate structure
      • 4.5.5 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 Background to development
      • 5.1.3 Fixed-line statistics
      • 5.1.4 Infrastructure development
      • 5.1.5 Joint operating service (KSO) ventures – five-zone plan
      • 5.1.6 Rural telephony
      • 5.1.7 Wireless Local Loop (WLL)
      • 5.1.8 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
      • 6.1.1 Market survey
    • 6.2 Internet statistics
    • 6.3 Social Networking
    • 6.4 Regulatory developments
      • 6.4.1 Indonesian Internet Agency (LII)
      • 6.4.2 Domain names
      • 6.4.3 Internet information control and the ‘cyber’ laws
    • 6.5 Internet infrastructure
      • 6.5.1 Telkom’s national IP backbone
    • 6.6 ISP market
    • 6.7 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
    • 7.3 ID-WiBB
    • 7.4 Data centres
    • 7.5 Cloud services
    • 7.6 High-Speed Broadband (HSBB) 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 E-services
      • 8.1.1 E-commerce
    • 8.2 Broadcasting market
      • 8.2.1 Overview
      • 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
    • 9.2 Background to market development
      • 9.2.1 Foreign ownership regulations
      • 9.2.2 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 Mobile TV
      • 9.7.3 Blackberry
      • 9.7.4 Mobile advertising
      • 9.7.5 Mobile banking
      • 9.7.6 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 – 2013
    • Table 2 – Telephone network statistics – March 2013
    • Table 3 – Internet user statistics – 2012
    • Table 4 – Broadband statistics – 2012
    • Table 5 – Mobile statistics – March 2013
    • Table 6 – National telecommunications authorities
    • Table 7 – Indonesia’s real GDP growth rate – 2006 - 2014
    • Table 8 – Major mobile operators and subscribers – 2012
    • Table 9 – Mobile subscribers and market share by operator – 2012
    • Table 10 – Mobile subscribers and market share by operator – March 2013
    • Table 11 – 3G mobile subscribers and market share by operator – March 2013
    • Table 12 – Major fixed-line operators - subscribers – 2010 - 2012
    • Table 13 – Fixed lines subscribers and annual change by operator – March 2013
    • Table 14 – PT Telkom’s subscribers by segment – March 2013
    • Table 15 – PT Telkom’s capital expenditure (capex) – 2008 - 2012
    • Table 16 – PT Telkom – revenue contribution by market segment – 2012
    • Table 17 – PT Telkom – revenue contribution by market segment – March 2013
    • Table 18 – Telkomsel mobile subscribers – postpaid, prepaid and market share – 1999 - 2013
    • Table 19 – Telkomsel: 3G subscribers – 2012 – 2013
    • Table 20 – Telkomsel post/prepaid ARPU – 2011
    • Table 21 – Telkomsel subscribers – postpaid and prepaid – 2001 - 2012
    • Table 22 – Telkomsel prepaid subscribers as proportion of total – 2002; 2004; 2009 - 2012
    • Table 23 – PT Telkom’s total fixed-line subscribers – 2004 - 2013
    • Table 24 – PT Telkom’s 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 – 2012
    • 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 contribution by market segment – 2010 - 2012
    • Table 30 – PT Indosat mobile subscribers – 2005 - 2013
    • Table 31 – PT Indosat postpaid and prepaid subscribers – 2012
    • Table 32 – PT Indosat postpaid and prepaid ARPU – 2009; 2011 - 2012
    • Table 33 – PT Indosat: 3G subscribers – 2012 - 2013
    • Table 34 – PT Indosat – fixed wireless subscribers – 2006 - 2012
    • Table 35 – PT Indosat – fixed wireless - prepaid and postpaid ARPU – 2006 - 2012
    • Table 36 – XL Axiata mobile subscribers – 2005 - 2013
    • Table 37 – XL Axiata: 3G subscribers – 2012 – 2013
    • Table 38 – PT Sampoerna (STI) subscribers – 2007 - 2009
    • Table 39 – SmartFren subscribers – 2010 - 2012
    • Table 40 – Mobile-8 subscribers – 2004 - 2011
    • Table 41 – Smart Telecom subscribers – 2007 - 2011
    • Table 42 – Axis Indonesia mobile subscribers – 2008 - 2013
    • Table 43 – Axis Indonesia: 3G subscribers – 2012 - 2013
    • Table 44 – 3 Indonesia subscribers – 2007 - 2012
    • Table 45 – 3 Indonesia: 3G subscribers – 2012 – 2013
    • Table 46 – Bakrie Telecom subscribers – 2004 - 2013
    • Table 47 – Bakrie Telecom – postpaid and prepaid fixed wireless subscribers – 2010 - 2012
    • Table 48 – Bakrie Telecom’s pre and postpaid ARPU – 2004 – 2010; 2012 - 2013
    • Table 49 – Fixed-line subscribers, annual change and teledensity – 1995 - 2013
    • Table 50 – Fixed lines subscribers and annual change by operator – March 2013
    • Table 51 – Fixed wireless v. wireline subscribers – March 2013
    • Table 52 – Planned five-year USO deployment of lines for villages – 2006 - 2010
    • Table 53 – Fixed-wireless (WLL) subscribers – 2003; 2007 - 2013
    • Table 54 – Fixed-wireless (WLL) subscribers by operator – March 2013
    • Table 55 – PT Telkom’s fixed wireless subscribers – 2003 - 2013
    • Table 56 – PT Telkom fixed-line wireless subscribers - prepaid v. postpaid – 2012
    • Table 57 – PT Telkom fixed-line subscribers - wireless v. wireline – 2012
    • Table 58 – Internet users – 1998 - 2013
    • Table 59 – Fixed internet subscribers – 1998 - 2012
    • Table 60 – Dial-up internet subscribers – 2004 - 2011
    • Table 61 – Total international internet bandwidth – 1998 - 2012
    • Table 62 – Households with internet access – 2005 - 2012
    • Table 63 – Domain name registrations – June 2010
    • Table 64 – Internet licences by licence type – 2007
    • Table 65 –TelkomNet’s dial-up internet subscribers – 2004 - 2011
    • Table 66 – IndosatNet’s dial-up internet subscribers – 2010 - 2011
    • Table 67 – Fixed broadband subscribers – 2000 - 2012
    • Table 68 – DSL subscribers – 2001 - 2012
    • Table 69 – Fixed broadband - subscribers and households - 2012
    • Table 70 – Mobile broadband subscribers – 2009 - 2012
    • Table 71 – PT Telkom’s fixed broadband subscribers – 2004 - 2012
    • Table 72 – PT Telkom’s mobile broadband subscribers – 2011 - 2012
    • Table 73 – Key broadcasting statistics – 2012
    • Table 74 – Broadcasting sector, TV households and home satellites – 1997 - 2012
    • Table 75 – Television audience share by operator – 2012
    • Table 76 – Pay TV subscribers – cable and satellite – 2001 - 2011
    • Table 77 – TelkomVision subscribers – 2007 - 2011
    • Table 78 – Mobile subscribers – 1995 - 2013
    • Table 79 –Total 3G mobile subscribers – 2009; 2012 - 2013
    • Table 80 – 3G mobile operators and subscribers – March 2013
    • Table 81 – Prepaid subscribers – selected mobile operators –2012
    • Table 82 – Forecast of fixed line subscribers and penetration rates – 2015; 2020
    • Table 83 – Forecast of Internet subscribers and penetration rates – 2015; 2020
    • Table 84 – 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 – 2013
    • Chart 6 - PT Telkom's total fixed line subscribers and annual change - 2005 – 2013
    • Chart 7 - Fixed-line subscribers and teledensity – 2005 - 2013
    • Chart 8 - Internet users and penetration - 2005 – 2013
    • Chart 9 - Pay TV subscribers - cable and satellite - 2001 – 2011
    • Chart 10 - Mobile subscribers and penetration – 2005 - 2013
    • Exhibit 1 – Major shareholder categories in PT Telkom – December 2011
    • Exhibit 2 – Major shareholders in PT Indosat – December 2012
    • Exhibit 3 – Palapa Ring Project – specification of rings
    • Exhibit 4 – Indonesian satellites – 2012
    • Exhibit 5 – Major FTA television broadcasters, ownership, launch date and coverage

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