In some ways, little has changed in Indonesian telecoms over the past year. The country still has eight operators and average revenue per user (ARPU) is still among the lowest in the world because the market is so crowded. In other ways, everything has changed. Mergers are in the works and the market is poised for consolidation. Once the number of providers is reduced to seven, it is expected that pricing will stabilise, investment will rise and quality will improve, resulting in more usage and better…
Telecoms & IT
From The Report: Indonesia 2014
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There is a growing sense that the telecoms market is evolving and becoming more segmented, with increased differentiation among players. This is helping the industry to move beyond the commodity stage, as customers begin to pick and choose and are no longer seeing all carriers as being the same. The merger between XL Axiata and Axis Telekom Indonesia received approval from the Ministry of Communications and Information Technology in December 2013, and the deal was completed in 2014. The combined entity is set to become the second-largest player in Indonesia. The prospects for the sector are the best in years. Mergers, additional spectrum and new technologies are helping to stop the decline in average revenue per user that defined the market for so long. While much IT-related activity in Indonesia is very basic, it is on a large scale and is growing rapidly. A density of use is being attained that is driving profitable advances. The next few years should bring rapid growth and intense competition. Companies from all over the world will be battling for market share, which should help keep prices down. Last mile and digital divide issues remain, but as they are solved the market will expand further.
This chapter contains interviews with Arief Yahya, President Director, PT Telekomunikasi Indonesia (Telkom); and Hasnul Suhaimi, President Director and CEO, XL Axiata.