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Indonesia - Telecoms, Mobile, Broadband and Forecasts

Published By :

BuddeComm

Published Date : Aug 2014

Category :

Broadband

No. of Pages : 148 Pages


Consolidation continues in Indonesia’s telecom market as customers 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 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 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 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 122% in early 2014) 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 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. At the same time it is noted that Indonesia is only moving slowly towards the introduction of 4G/LTE technology with both the government and the operators not appearing keen about it just yet.

Estimates for the number of internet users in Indonesia at the end of 2013 vary from 40 million to 55 million; in any case this represents a rapidly growing internet population. At the same time, the fixed internet subscription market was generally depressed with just three million subscribers reported by end-2013. Broadband subscriptions are certainly growing but from a low base. The expansion of mobile broadband in particular was compensating for the sluggish fixed broadband market and offering real promise for increased online activity as the uptake of new generation mobile services accelerates.
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
4.3.4 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 Axiata’s acquisition of Axis
4.5.3 Operational statistics
4.5.4 Financials
4.5.5 Corporate structure
4.5.6 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 Fixed-line statistics
5.1.3 Infrastructure development
5.1.4 Joint operating service (KSO) ventures – five-zone plan
5.1.5 Rural telephony
5.1.6 Wireless Local Loop (WLL)
5.1.7 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 Social Networking
6.5 Regulatory developments
6.5.1 Indonesian Internet Agency (LII)
6.5.2 Domain names
6.5.3 Internet information control and the ‘cyber’ laws
6.6 Internet infrastructure
6.6.1 Telkom’s national IP backbone
6.7 ISP market
6.8 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
7.2.4 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
7.7.4 LTE / Fourth Generation (4G)
7.8 Internet via satellite

8. Digital Media / Digital Economy
8.1 Digital Economy
8.1.1 E-commerce
8.2 Digital Media
8.2.1 Broadcasting market
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
9.1.3 Smartphones
9.2 Background to development of the mobile market
9.2.1 Overview
9.2.2 Foreign ownership regulations
9.2.3 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 KakaoTalk
9.7.3 Mobile TV
9.7.4 Blackberry
9.7.5 Mobile advertising
9.7.6 Mobile banking / payment
9.7.7 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

List of Table


Table 1 – Country statistics – 2014
Table 2 – Telephone network statistics – 2013
Table 3 – Internet user statistics – 2013
Table 4 – Broadband statistics – 2013
Table 5 – Mobile statistics – 2013
Table 6 – National telecommunications authorities
Table 7 – Indonesia’s real GDP growth rate – 2006 - 2015
Table 8 – Major mobile operators and subscribers – 2013
Table 9 – Mobile subscribers and market share by operator – 2012
Table 10 – Mobile subscribers and market share by operator – 2013
Table 11 – 3G mobile subscribers and market share by operator – March 2013
Table 12 – Major fixed-line operators - subscribers – 2010 - 2013
Table 13 – Fixed lines subscribers and annual change by operator – 2013
Table 14 – PT Telkom’s subscribers by segment – 2013
Table 15 – PT Telkom’s capital expenditure (capex) – 2008 - 2014
Table 16 – PT Telkom – revenue contribution by market segment – 2012
Table 17 – PT Telkom – revenue contribution by market segment – 2013
Table 18 – Telkomsel mobile subscribers – postpaid, prepaid and market share – 1999 - 2014
Table 19 – Telkomsel: 3G subscribers – 2012 – 2013
Table 20 – Telkomsel’s mobile broadband subscribers – 2011 - 2013
Table 21 – Telkomsel subscribers – postpaid and prepaid – 2001 - 2013
Table 22 – Telkomsel prepaid subscribers as proportion of total – 2002; 2004; 2009 - 2013
Table 23 – PT Telkom’s total fixed-line subscribers – 2004 - 2013
Table 24 – PT Telkom: - 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 – 2013
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 and contribution by market segment – 2013
Table 30 – PT Indosat – revenue contribution by market segment – 2010 - 2013
Table 31 – PT Indosat mobile subscribers – 2005 - 2014
Table 32 – PT Indosat postpaid and prepaid mobile subscribers – 2013
Table 33 – PT Indosat postpaid and prepaid mobile ARPU – 2011 - 2013
Table 34 – PT Indosat: 3G subscribers – 2012 - 2013
Table 35 – PT Indosat – fixed wireless subscribers – 2006 - 2013
Table 36 – PT Indosat – fixed wireless - prepaid and postpaid ARPU – 2006 - 2013
Table 37 – XL Axiata mobile subscribers – 2005 - 2014
Table 38 – XL Axiata: 3G subscribers – 2012 – 2013
Table 39 – XL Axiata: blended ARPU – 2012 – 2013
Table 40 – PT Sampoerna (STI) subscribers – 2007 - 2009
Table 41 – SmartFren subscribers – 2010 - 2014
Table 42 – Historical - Mobile-8 subscribers – 2004 - 2011
Table 43 – Historical - Smart Telecom subscribers – 2007 - 2011
Table 44 – Axis Indonesia mobile subscribers – 2008 - 2013
Table 45 – Axis Indonesia: 3G subscribers – 2012 - 2013
Table 46 – 3 Indonesia subscribers – 2007 - 2013
Table 47 – 3 Indonesia: 3G subscribers – 2012 – 2013
Table 48 – Bakrie Telecom subscribers – 2004 - 2014
Table 49 – Bakrie Telecom – postpaid and prepaid fixed wireless subscribers – 2010 - 2013
Table 50 – Bakrie Telecom - subscribers – voice v. data – 2013
Table 51 – Bakrie Telecom’s pre and postpaid ARPU – 2004 - 2013
Table 52 – Fixed-line subscribers, annual change and teledensity – 1995 - 2014
Table 53 – Fixed lines subscribers and annual change by operator – March 2013
Table 54 – Fixed lines subscribers and annual change by operator – 2013
Table 55 – Fixed wireless v. wireline subscribers – March 2013
Table 56 – Planned five-year USO deployment of lines for villages – 2006 - 2010
Table 57 – Fixed-wireless (WLL) subscribers – 2003; 2007 - 2013
Table 58 – Fixed-wireless (WLL) subscribers by operator – 2013
Table 59 – PT Telkom’s fixed wireless subscribers – 2003 - 2013
Table 60 – PT Telkom fixed-line wireless subscribers - prepaid v. postpaid – 2012
Table 61 – PT Telkom fixed-line subscribers - wireless v. wireline – 2013
Table 62 – Internet users – 1998 - 2014
Table 63 – Fixed internet subscribers – 1998 - 2013
Table 64 – Dial-up internet subscribers – 2004 - 2013
Table 65 – Total international internet bandwidth – 1998 - 2014
Table 66 – Households with internet access – 2005 - 2014
Table 67 – Domain name registrations – June 2010
Table 68 – Internet licences by licence type – 2007
Table 69 – Historical - TelkomNet’s dial-up internet subscribers – 2004 - 2011
Table 70 – Historical - IndosatNet’s dial-up internet subscribers – 2010 - 2011
Table 71 – Fixed broadband subscribers – 2000 - 2014
Table 72 – DSL subscribers – 2001 - 2013
Table 73 – Fixed broadband - subscribers and households - 2013
Table 74 – Mobile broadband subscribers – 2009 - 2014
Table 75 – PT Telkom’s fixed broadband subscribers – 2004 - 2014
Table 76 – PT Telkom’s mobile broadband subscribers – 2011 - 2013
Table 77 – Key broadcasting statistics – 2013
Table 78 – Broadcasting sector, TV households and home satellites – 1997 - 2013
Table 79 – Television audience share by operator – 2012
Table 80 – Pay TV subscribers – cable and satellite – 2001 - 2011
Table 81 – TelkomVision subscribers – 2007 - 2013
Table 82 – Mobile subscribers – 1995 - 2014
Table 83 –Total 3G mobile subscribers – 2009; 2012 - 2013
Table 84 – 3G mobile operators and subscribers – March 2013
Table 85 – Prepaid subscribers – selected mobile operators –2012
Table 86 – Forecast of fixed line subscribers and penetration rates – 2015; 2020
Table 87 – Forecast of fixed broadband subscribers and penetration rates – 2015; 2020
Table 88 – Forecast of mobile subscribers and penetration rates – 2015; 2020

List of Chart

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 – 2014
Chart 6 - PT Telkom’s total fixed line subscribers and annual change - 2005 – 2013
Chart 7 - Fixed-line subscribers and teledensity – 2005 - 2014
Chart 8 - Internet users and penetration - 2005 – 2014
Chart 9 - Fixed broadband subscribers and penetration - 2005 - 2014
Chart 10 - Pay TV subscribers - cable and satellite - 2001 – 2011
Chart 11 - Mobile subscribers and penetration – 2005 - 2014

Exhibit 1 – Major shareholder categories in PT Telkom – December 2013
Exhibit 2 – Major shareholders in PT Indosat – December 2013
Exhibit 3 – Palapa Ring Project – specification of rings
Exhibit 4 – Indonesian satellites – 2013
Exhibit 5 – Major FTA television broadcasters, ownership, launch date and coverage

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