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.

Articles from this Chapter

Overview

Consolidate to accumulate: A reduction in the number of players could help shore up ARPU
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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…

Interview

Arief Yahya, President Director, Telekomunikasi Indonesia (Telkom): Interview
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Interview:Arief Yahya What progress has been made on the national broadband network and how are you overcoming the challenges of connecting the archipelago? ARIEF YAHYA: Good progress has been made, despite the inevitable challenges of connecting a nation made up of thousands of islands. To build the infrastructure for the national broadband network, we have launched the Indonesia Digital Networks 2015 initiative. So far, true broadband has reached 8.6m home pass. We are building a digital…

Interview

Hasnul Suhaimi, President Director & CEO, XL Axiata: Interview
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Interview:Hasnul Suhaimi What is your outlook for new mobile subscribers growth over the next 18 months, and how are operators competing for this new market? HASNUL SUHAIMI: There are between 280m and 290m active SIM cards in Indonesia for a population of 250m, so penetration is nearly at 120%. Taking these statistics into consideration, we cannot expect significant growth under the present market’s conditions, at least when it comes to voice and SMS. In the past we got used to double-digit…

Analysis

Horse before the cart: The arrival of modern handsets is paving the way for data
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The mobile market in Indonesia is largely dependent on increased use of the right kind of handsets. Operators may be able to supply the bandwidth, but if users do not have devices to take advantage of it the demand will not be there. The country also needs to nurture a stronger data culture if growth is to be achieved. For the operators, without the phones it does not make sense to invest in base transceiver stations. Yet without the capacity, customers have been limited to talking and texting. However,…

Analysis

Towers of strength: Capital-intensive segment could be set to pay off in the coming years
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Businesses supporting and on the periphery of Indonesia’s telecoms market have been active over the past year as the sector evolved and grew. Firms selling mobile phones or owning and operating base transceiver station (BTS) towers have taken on partners, made significant investments and formed new ventures. These businesses are now in a perfect position to capture growth in telecoms services. Growth According to consultancy Frost & Sullivan (F&S), towers is a good business to be in in…

Overview

All down the line: An internet-literate populace provides solid foundations for IT growth
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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. Significant development is also being seen at the business and enterprise level, suggesting that technology is starting to take root in the economy. Questions remain about infrastructure, inclusiveness and local development, but a foundation has been put in place on which a thriving sector can be built. The retail side of…

Analysis

Network news: Improving international connectivity is among the items on the agenda
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As Indonesia develops connectivity domestically, it has to begin thinking about international links. The emphasis to date has been on unifying the nation via the internet, and considerable progress has been made. The building of the internet backbone has been important in getting more of the remote corners of the archipelago online, while wireless broadband has helped expand high-speed access. Yet domestic connections are of limited value. If the country is to have a robust technology sector, its…

Analysis

Thorny issue: The rise of smartphones has left one major player seeking to adapt
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The rise of the smartphone has dealt a blow to the fortunes of BlackBerry globally, and it has been hit especially hard in Indonesia. The country was traditionally one of the best markets for the company. BlackBerry’s market share in the country went from less than 10% to almost half the market in two years to 2011. It has now dropped down to about 20%, and is still falling. While the collapse was sudden, it was a long time in the making. The Indonesian tech market has become far more competitive,…