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Indonesia - Key Statistics, Telecommunications Market, Infrastructure, Regulatory Overview and Forecasts

Attention: There is an updated edition available for this report.

There has been considerable energy and turmoil in the Indonesian telecom sector over the last decade. Growth, both in subscriber numbers and in revenues, has been occurring and, more importantly, there are signs that the changes in the regulatory regime and operator restructuring are starting to have a positive effect on the industry. The mobile market has been especially strong and there has been a good response to the launch of 3G networks by five operators. However, there were some signs that the government was hesitating in its efforts to restructure the industry. Indonesia, with its distinctively challenging geographical character, has been working over a long period to put viable and progressive telecom infrastructure in place. When the government launched its Joint Operating Service (KSO) strategy, it had high hopes that this would be the main driver for the development of the national fixed-line telephone network. The KSO program fell well short of expectations. The country has since made a fresh start on the building of its telecom infrastructure. Invigorated by the highly successful mobile segment on the back of increased competition in the marketplace, the country’s telecom industry has found a new dynamic.

This report gives an overview of the market at a time when it seems to have successfully weathered the worst of the country’s economic and social difficulties. Some pertinent statistics are provided for the general telecom sector. The report looks at progress in building infrastructure, in particular the development of the fixed-line network, and describes some of the changes, as the industry picks up momentum again. Scenario forecasts are provided for the fixed-line subscriber market.

Key developments:

Indonesia’s economy continued its run of strong positive growth, with GDP expected to increase by over 6% in 2013/2014;
The mobile market in Indonesia has been growing strongly, but at a more modest rate than previously (around 10% annually);
Fixed wireless, which suffered a setback in 2011 with a declining market, has regained momentum, with almost 80% of total fixed-line market;
Broadband services were growing at around 30% annually;
Almost 70% of internet subscribers had broadband access;
Construction of the US$1.5 billion Palapa Ring optical fibre cable project was continuing.
The launch of PT Telkom’s Telkom 3 satellite in August 2012 was a failure; PT Telkom was looking for a new partner in the Telkom 3 satellite project.

Companies covered in this report include:

PT Telkom; PT Indosat; Bakrie Telecom (BTEL); Qatar Telecom (QTel); PT Satelindo; SingTel; ThaiCom. PT Telkomsel, Mobile-8, Smart Telecom, PT Bakrie Telecom SingTel, Temasek; PT Sarana Menara Nusantara; PT Tower Bersama.

1. Synopsis
2. Key statistics
3. Indonesia’s Telecommunications market
3.1 Overview
3.2 Economy
3.3 Background to development
3.4 Market growth
3.4.1 Mobile sector
3.4.2 Fixed-line services
3.4.3 Broadband
3.4.4 Other
4. Regulatory environment
4.1 Background
4.1.1 Telecommunications Law 1989
4.1.2 Telecommunications Law 2000
4.1.3 Cross shareholdings
4.1.4 Ministry of Communication and Informatics (MoCI)
4.2 Corruption
4.3 Regulatory developments
4.3.1 SMS spam
4.3.2 AT&T licence
4.3.3 Control of the internet
4.3.4 Price fixing
4.4 Anti-monopoly case
4.5 Privatisation process
4.5.1 Background
4.5.2 Foreign ownership
5. National infrastructure
5.1 Overview
5.2 Background to development
5.3 Fixed-line statistics
5.4 Forecasts – fixed-line market: 2015; 2020
5.5 Infrastructure development
5.5.1 Palapa Ring Project
5.6 Joint operating service (KSO) ventures – five-zone plan
5.6.1 Background: the KSO strategy
5.6.2 Difficulties with the KSOs
5.6.3 Restructuring of KSOs
5.7 Rural telephony
5.7.1 Village Phone Program (VPP)
5.8 Wireless Local Loop (WLL)
5.8.1 Background
5.8.2 WLL Statistics
5.8.3 PT Telkom
5.8.4 PT Indosat
5.8.5 Bakrie Telecom
5.9 Telecom towers
6. International infrastructure
6.1 International gateway exchanges
6.2 Submarine cable networks
6.2.2 Thailand-Indonesia-Singapore (TIS)
6.2.3 Dumai-Melaka Cable System (DMCS)
6.2.4 Batam Singapore Cable System (BSCS)
6.2.5 Sistem Komunikasi Kabel Laut (SKKL)
6.2.6 Java-Sumatra-Kalimantan (JaSuKa) network
6.2.7 SEA-ME-WE 4 cable
6.2.8 Other
6.3 Satellite networks
6.3.1 Satellite communications
7. Notes on scenario forecasts
8. Related reports
Table 1 – Country statistics – 2013
Table 2 – Telephone network statistics – March 2013
Table 3 – Internet user statistics – 2012
Table 4 – Broadband statistics – 2012
Table 5 – Mobile statistics – March 2013
Table 6 – National telecommunications authorities
Table 7 – Indonesia’s real GDP growth rate – 2006 - 2014
Table 8 – Fixed-line subscribers, annual change and teledensity – 1995 - 2013
Table 9 – Fixed lines subscribers and annual change by operator – March 2013
Table 10 – Fixed wireless v. wireline subscribers – March 2013
Table 11 – Forecast of fixed line subscribers and penetration rates – 2015; 2020
Table 12 – Planned five-year USO deployment of lines for villages – 2006 - 2010
Table 13 – Fixed-wireless (WLL) subscribers – 2003; 2007 - 2013
Table 14 – Fixed-wireless (WLL) subscribers by operator – March 2013
Table 15 – PT Telkom’s fixed wireless subscribers – 2003 - 2013
Table 16 – PT Telkom fixed-line wireless subscribers - prepaid v. postpaid – 2012
Table 17 – PT Telkom fixed-line subscribers - wireless v. wireline – 2012
Chart 1 - Fixed-line subscribers and teledensity – 2005 - 2013
Exhibit 1 – Palapa Ring Project – specification of rings
Exhibit 2 – Indonesian satellites – 2012

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