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Indonesia - Telecoms, Mobile and Broadband

  • June 2015
  • -
  • Paul Budde Communication Pty Ltd
  • -
  • 159 pages

Indonesia continues to embrace mobile broadband
After a period of uncertainty, the Indonesian telecom sector has settled into what looks to be a steady 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 have been the crowded operator market, especially the mobile segment, and the slow rate of implementing regulatory decisions. The market has finally started to see some serious consolidation, with a number of operator mergers happening. On a broader front, beyond the telecom sector itself, there is no avoiding the fact that Indonesia must also continue to deal with a range of social, political and economic issues that have proven 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 over 130% at the start of 2015) 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 and, more recently, the 4G/LTE services being offered by the operators. The take up of mobile data services is certainly on the rise, as evidenced by a significant surge in the sale of smartphones.

Estimates for the number of internet users in Indonesia vary considerably; in any case there is definitely a rapidly growing internet user population. At the same time, the fixed internet subscription market was generally depressed. Nevertheless, broadband subscriptions are now growing, but from a low base. The expansion of mobile broadband in particular was compensating to a significant extent for the sluggish fixed broadband market and offering real promise for increased online activity as the uptake of new generation mobile services accelerates.

Key developments:
The mobile market in Indonesia has been growing strongly, but at a more modest rate than previously (just under 10% annually);
The fixed line market (wireless and wireline) continues to suffer setbacks, with a rapidly declining subscriber base;
Broadband services are finally starting to grow, boosted by surging mobile broadband;
The mobile broadband explosion has subscriber numbers at around 65 million (26% penetration) by end-2014;
Around 60% of fixed internet subscribers had broadband access;
Data traffic is growing quickly and forecast to expand six-fold, from 84EB in 2014 to 656EB by 2020;
Surge in demand for data traffic sees operators increasing system capacity;
The government’s initiative on national infrastructure will push for fibre and 4G coverage nationwide;
Both Telkom and Indosat have been expanding the number of WiFi hotspots around the country;
TD-LTE wireless broadband operator Internux, trading as ‘Bolt’, reported that it had signed up 750,000 customers in the first ten months since its commercial launch in Jakarta;
Telkomsel and XL Axiata both launched 4G/LTE services commercially in December 2014;
In early 2015 SmartFren was looking to upgrade of its CDMA 3G network to 4G/LTE;
Market leader Telkomsel was continuing to dominate the mobile market, with its mobile subscriber base of around 45% market share;
Indosat was assigned a 4G concession in early 2015 allowing it to use frequencies of 800MHz, 900MHz and 1800MHz;
PT Indosat, battling with Axiata for second place in the mobile market well behind Telkomsel, saw strong growth in 2014 to put it firmly in second place.

Companies mentioned in this report
PT Telkom; PT Telkomsel; PT Indosat; PT Satelindo; IM3 Indosat; Bakrie Telecom (BTEL). Qatar Telecom (QTel); XL Axiata; PT Hutchison CP; SmartFren; Mobile 8; Smart Telecom; PT Natrindo Telepon Selular (NTS); SingTel; Temasek; Qtel; Bolt/Internux.

Table Of Contents

Indonesia - Telecoms, Mobile and Broadband
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 ATandT licence
3.3.3 Control of the internet
3.3.4 Price fixing
3.3.5 Spectrum
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 Developments
4.5.3 Axiata's acquisition of Axis
4.5.4 Operational statistics
4.5.5 Financials
4.5.6 Corporate structure
4.5.7 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
4.12 Bolt
5. Telecommunications Infrastructure
5.1 National infrastructure
5.1.1 Overview
5.1.2 Government initiative March 2015
5.1.3 Fixed-line statistics
5.1.4 Forecasts fixed-line market: 2015; 2020
5.1.5 Infrastructure development
5.1.6 Joint operating service (KSO) ventures five-zone plan
5.1.7 Rural telephony
5.1.8 Wireless Local Loop (WLL)
5.1.9 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 Forecasts internet services 2015; 2020
6.5 Social Networking
6.6 Regulatory developments
6.6.1 Indonesian Internet Agency (LII)
6.6.2 Domain names
6.6.3 Internet information control and the cyber' laws
6.7 Internet infrastructure
6.7.1 Telkom's national IP backbone
6.8 ISP market
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 / LinkNet
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 - background
7.7.4 LTE / Fourth Generation (4G)
7.8 Internet via satellite
7.9 E-services
7.9.1 E-commerce
7.10 Voice over Internet Protocol (VoIP)
8. Digital Media / Digital Economy
8.1 Broadcasting market
8.1.1 Overview
8.1.2 Regulatory environment
8.1.3 Free-to-Air (FTA) TV
8.1.4 Cable and pay TV
8.1.5 Satellite TV
8.1.6 Internet Protocol TV (IPTV)
8.1.7 Mobile TV
9. Mobile Communications
9.1 Overview of Indonesia's mobile market
9.1.1 Handset market
9.1.2 Spectrum
9.2 Operational statistics
9.3 Forecasts mobile market: 2015; 2020
9.4 Background to market development
9.4.1 Foreign ownership regulations
9.4.2 Temasek and anti-monopoly ruling
9.5 Mobile technologies
9.5.1 GSM
9.5.2 Code Division Multiple Access (CDMA)
9.6 Third Generation (3G) mobile
9.6.1 Background and initial licensing process
9.6.2 Second 3G auction
9.6.3 Launch of 3G services
9.6.4 Expansion and marketing of 3G services
9.6.5 Further auction of 3G spectrum
9.7 4G / Long Term Evolution (LTE) services
9.8 Mobile voice services
9.8.1 Prepaid
9.8.2 Satellite mobile
9.9 Mobile data services
9.9.1 Short Message Service (SMS)
9.9.2 Mobile TV
9.9.3 Blackberry
9.9.4 Mobile advertising
9.9.5 Mobile banking
9.9.6 Village Phone Program (VPP)
9.9.7 M2M
9.9.8 Near Field Communication (NFC)
Table 1 Country statistics 2014
Table 2 Telephone network statistics 2014
Table 3 Internet user statistics 2014
Table 4 Broadband statistics 2014
Table 5 National telecommunications authorities
Table 6 Mobile statistics 2014
Table 7 Indonesia's real GDP growth rate 2006 - 2015
Table 8 Frequency spectrum overview - major mobile operators December 2014
Table 9 Major mobile operators and subscribers 2014
Table 10 Mobile subscribers and market share by operator 2014
Table 11 Mobile subscribers and market share by operator 2012
Table 12 3G mobile subscribers and market share by operator March 2013
Table 13 Major fixed-line operators - subscribers 2010 - 2014
Table 14 Fixed lines subscribers and annual change by operator 2014
Table 15 PT Telkom's subscribers by segment 2014
Table 16 PT Telkom's capital expenditure (capex) 2008 - 2015
Table 17 PT Telkom revenue contribution by market segment 2014
Table 18 PT Telkom revenue contribution by market segment 2013
Table 19 Telkomsel mobile subscribers postpaid, prepaid and market share 1999 - 2014
Table 20 Telkomsel: 3G subscribers 2012 2013
Table 21 Telkomsel's mobile broadband subscribers 2011 - 2014
Table 22 Telkomsel subscribers postpaid and prepaid 2001 - 2014
Table 23 Telkomsel prepaid subscribers as proportion of total 2002; 2004; 2009 - 2014
Table 24 PT Telkom's total fixed-line subscribers 2004 - 2014
Table 25 PT Telkom: - fixed lines in service wireline v. wireless - 2009 - 2014
Table 26 PT Telkom postpaid and prepaid fixed wireless subscribers 2012
Table 27 PT Telekom fixed wireless pre and postpaid ARPU 2004 2013
Table 28 PT Telkom's fixed broadband subscribers 2012 - 2014
Table 29 PT Telkom fixed wireless subscribers 2003 2014
Table 30 PT Indosat revenue and contribution by market segment 2013
Table 31 PT Indosat revenue and contribution by market segment 2014
Table 32 PT Indosat revenue contribution by market segment 2010 - 2014
Table 33 PT Indosat mobile subscribers 2005 - 2014
Table 34 PT Indosat postpaid and prepaid mobile subscribers 2014
Table 35 PT Indosat postpaid and prepaid mobile ARPU 2011 - 2014
Table 36 PT Indosat: 3G subscribers 2012 - 2013
Table 37 PT Indosat fixed wireless subscribers 2006 - 2014
Table 38 PT Indosat fixed wireless - prepaid and postpaid ARPU 2006 - 2013
Table 39 XL Axiata mobile subscribers 2005 - 2014
Table 40 XL Axiata -mobile subscribers postpaid v. prepaid 2013 - 2014
Table 41 XL Axiata: 3G subscribers 2012 2013
Table 42 XL Axiata: blended ARPU 2012 2014
Table 43 XL Axiata: SMS volumes 2013 2014
Table 44 PT Sampoerna (STI) subscribers 2007 - 2009
Table 45 SmartFren subscribers 2010 - 2014
Table 46 Historical - Mobile-8 subscribers 2004 - 2011
Table 47 Historical - Smart Telecom subscribers 2007 - 2011
Table 48 Axis Indonesia mobile subscribers 2008 - 2013
Table 49 Axis Indonesia: 3G subscribers 2012 - 2013
Table 50 3 Indonesia subscribers 2007 - 2014
Table 51 3 Indonesia: 3G subscribers 2012 2013
Table 52 Bakrie Telecom subscribers 2004 - 2014
Table 53 Bakrie Telecom postpaid and prepaid fixed wireless subscribers 2011 - 2014
Table 54 Bakrie Telecom - subscribers voice v. data March 2014
Table 55 Bakrie Telecom's pre and postpaid ARPU 2004 - 2014
Table 56 Fixed-line subscribers, annual change and teledensity 1995 - 2014
Table 57 Fixed lines subscribers and annual change by operator 2013
Table 58 Fixed lines subscribers and annual change by operator 2014
Table 59 Fixed wireless v. wireline subscribers 2014
Table 60 Forecast of fixed line subscribers and penetration rates 2015; 2020
Table 61 Planned five-year USO deployment of lines for villages 2006 - 2010
Table 62 Fixed-wireless (WLL) subscribers 2003; 2007 - 2014
Table 63 Fixed-wireless (WLL) subscribers by operator 2013 - 2014
Table 64 PT Telkom's fixed wireless subscribers 2003 - 2014
Table 65 PT Telkom fixed-line wireless subscribers - prepaid v. postpaid 2012
Table 66 PT Telkom fixed-line subscribers - wireless v. wireline 2013
Table 67 Internet users 1998 - 2015
Table 68 Internet users 2005 2015; 2017
Table 69 Fixed internet subscribers 1998 - 2014
Table 70 Dial-up internet subscribers 2004 - 2013
Table 71 Total international internet bandwidth 1998 - 2014
Table 72 Households with internet access 2005 - 2014
Table 73 Forecast of fixed broadband subscribers and penetration rates 2015; 2020
Table 74 Domain name registrations June 2010
Table 75 Internet licences by licence type 2007
Table 76 Historical - TelkomNet's dial-up internet subscribers 2004 - 2011
Table 77 Historical - IndosatNet's dial-up internet subscribers 2010 - 2011
Table 78 Fixed broadband subscribers 2000 - 2014
Table 79 DSL subscribers 2001 - 2014
Table 80 Fixed broadband - subscribers and households - 2014
Table 81 Mobile broadband subscribers 2009 - 2014
Table 82 PT Telkom's fixed broadband subscribers 2004 - 2014
Table 83 PT Telkom's mobile broadband subscribers 2011 - 2014
Table 84 Key broadcasting statistics 2014
Table 85 Broadcasting sector, TV households and home satellites 1997 - 2012
Table 86 Television audience share by operator 2012
Table 87 Pay TV subscribers cable and satellite 2001 - 2011
Table 88 TelkomVision subscribers 2007 - 2011
Table 89 Mobile subscribers 1995 - 2015
Table 90 Total 3G mobile subscribers 2009; 2012 - 2013
Table 91 Forecast of mobile subscribers and penetration rates 2015; 2020
Table 92 3G mobile operators and subscribers March 2013
Table 93 Prepaid subscribers selected mobile operators 2014
Table 94 Smartphone users and penetration 2011 - 2015
Chart 1 - Mobile subscribers and market share by operator - 2014
Chart 2 Mobile subscribers and market share by operator 2012
Chart 3 - 3G mobile subscribers and market share by operator - March 2013
Chart 4 - PT Telkom - revenue contribution by market segment - 2013
Chart 5 - Telkomsel mobile subscribers and market share - 2008 2014
Chart 6 - Fixed-line subscribers and teledensity 2005 - 2014
Chart 7 - Internet users and penetration - 2005 2015
Chart 8 - Fixed broadband subscribers and penetration - 2005 - 2014
Chart 9 - Pay TV subscribers - cable and satellite - 2001 2011
Chart 10 - Mobile subscribers and penetration 2007 - 2015
Exhibit 1 PT Telkom major shareholder groups December 2014
Exhibit 2 Major shareholder categories in PT Telkom December 2014
Exhibit 3 Major shareholders in PT Indosat December 2014
Exhibit 4 Palapa Ring Project specification of rings
Exhibit 5 Indonesian satellites 2013
Exhibit 6 Major FTA television broadcasters, ownership, launch date and coverage

Companies Mentioned

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