2011 Indonesia - Telecoms, Mobile, Broadband and Forecasts

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Last updated: 28 Nov 2011 Update History

Report Status: Archived

Report Pages: 132

Analyst: Peter Evans

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:- November 2011 (17th Edition)

Executive Summary

Wireless technology provides Indonesia’s fixed-line market with fresh new growth

Indonesia, the largest economy within the Association of South East Asian Nations (ASEAN), Indonesia has built a substantial telecom sector, providing a solid platform for further growth. This has been despite the occasional serious setback. This country of around 240 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 needed to support what is a uniquely complex geography. At the same time, there is no avoiding the fact that Indonesia must also deal with a range of social, political and economic issues that have been proving problematic.

Although more than a decade ago, the Asian economic crisis of the late 1990s forced the government to take steps to reshape the telecom industry that are still having an impact today. In fact in recent times the telecom market has taken on a new impetus. Previously this the government had certainly been addressing the issues and working towards a more competitive market; but progress had been slow and at times erratic. The reform process was accelerated, with the government being more decisive; over this same period Indonesia has been experiencing healthy sustained growth in subscriber numbers and revenues.

While fixed-line teledensity remained disconcertingly low for a number of years there has been a recent upturn that has delivered much better outcomes (over 16% fixed-line penetration by early 2011). The biggest single factor in this surge has been the advent of the fixed-wireless service. This technology has considerably boosted the growth rate in the last few years and provided much-needed basic telephone services to previously unserved communities. The roll-out of fixed-wireless infrastructure has been given good support by the operators with Bakrie Telecom and PT Telkom leading the way. By end-2010, fixed-wireless services made up about 80% of the total fixed-line subscriber base. In other words, in a short space of four years this technology platform had transformed the fixed-line market.

Meanwhile, Indonesia’s mobile market has continued to grow. While the global financial crisis saw growth slow somewhat in 2009, the market has did not lose much momentum. In the 18 months up to June 2011 the subscriber base grew from 150 million to 250 million. Whilst penetration had passed 100%, the industry view was that there was still considerable potential for further growth in the market. Market interest hard started to shift to the 3G services being offered by the operators, attracted by the potential of 3G to boost Average Revenue per User (ARPU)

The number of internet users in Indonesia was estimated at 22 million by early 2011, representing a relatively low overall penetration of 9%. At the same time, the internet subscription market was generally depressed with less than 7 million subscribers reported by early 2011. Broadband internet access, whilst certainly increasing, remained at a relatively low level of activity. Importantly, broadband subscriptions were already running at around 40% of the total internet subscriber base. While the government was continuing to promote greater use of online services, these efforts appeared to be having only limited impact on the take up rate of the various Internet services on offer.

Market highlights:

  • Indonesia’s mobile market passed 250 million subscribers in mid-2011 with penetration running at just over 100%;
  • After years of strong growth, the annual increase in mobile subscribers had moderated somewhat by 2011 to somewhere around 20%;
  • Indonesia’s 3G market was still in its infancy four years after launch, with 3G subscribers representing only a modest percentage of the total mobile subscriber base;
  • Nevertheless, much is expected of 3G and beyond with the operators keenly pursuing 3G business because of its potential to increased ARPU.
  • Internet penetration remained low (9% user penetration by end-2010) and internet subscription rates were considerably lower;
  • Broadband internet access numbers in Indonesia were starting to grow and by 2011 broadband as a proportion of the total internet base was running at 40%;
  • DSL remained the dominant broadband platform for the time being; the heavy reliance on limited copper-wire infrastructure to access DSL services offers a huge opportunity for increased use of wireless-based internet access.

Indonesia - key telecom parameters – 2010 - 2011

Category

2010

2011 (e)

Fixed-line services:

 

 

Total number of subscribers

40.0 million

43.0 million

Annual growth

18%

8%

Fixed-line penetration (population)

17%

20%

Fixed-line penetration (household)

69%

74%

Internet:

 

 

Total number of subscribers

5.8 million

6.5 million

Annual growth

18%

12%

Internet subscriber penetration (population)

2.4%

2.7%

Internet subscriber penetration (household)

10%

11%

Mobile services:

 

 

Total number of subscribers

220 million

265 million

Annual growth

38%

20%

Mobile penetration (population)

92%

110%

(Source: BuddeComm)

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