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Indonesia - Telecoms, Mobile, Broadband and Forecasts


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Indonesia starting to embrace broadband on a grander scale

After a period of uncertainty, the Indonesian telecom sector has settled into a healthy development phase. This country of around 240 million people presents a huge potential market; however, it faces some particularly big challenges that need to be confronted 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. At the same time, 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 has now become the dominant component within the fixed market segment; by 2011 it made up 80% of the total fixed-line subscriber base. The introduction of fixed wireless has also seen a major upturn in fixed subscriber numbers with teledensity reaching 17% by early 2012. Wireless technology has not only boosted the growth rate in the last few years; it has provided much-needed basic telephone services to previously unserved communities. In a short space of five years this technology platform had transformed the fixed-line market.

Meanwhile, a strong mobile market (penetration of 107% in early 2012) was still short of what is generally regarded as saturation. While the global financial crisis saw growth in mobile subscribers slow somewhat back in 2009, the market did not lose much momentum overall. In the two years to December 2011 the mobile subscriber base grew from 150 million to 260 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 in 2010/2011.

The number of internet users in Indonesia was estimated at 24 million by early 2012, representing a relatively low overall population penetration of 10%. At the same time, the internet subscription market was generally depressed with just four million subscribers reported by early 2012. Dial-up services had dominated the market up until recently, but the last 2-3 years has seen broadband development accelerate. So much so that broadband was suddenly was the majority form of internet access. Overall internet penetration remained low, however, and was a cause for concern. The expansion of mobile broadband was, nevertheless, offering hope to the internet market as uptake of new generation services accelerates.

Market highlights:

Indonesia’s mobile market passed 260 million subscribers in early 2012 with penetration running at just over 107%;

After years of strong growth, the annual increase in mobile subscribers had moderated somewhat by 2012 to somewhere around 15%;

The 3G market had got off to a slow start, but by 2011/2012 there were sign of a surge in growth, with sales of smartphones jumping sharply;

Internet user penetration remained low (10% user penetration by end-2011) and internet subscription rates were considerably lower;

With broadband internet access numbers in Indonesia growing rapidly, by 2011 broadband as a proportion of the total internet subscriber base was running at almost 70%;

DSL remained the dominant broadband platform for the time being; the heavy reliance on limited copper-wire infrastructure to access DSL services offers a huge opportunity for increased use of wireless-based internet access.

Indonesia: - key telecom parameters – 2011 - 2012
Category
2011
2012 (e)
Fixed-line services:
Total No. of subscribers
41.0
43.0
Annual growth (e)
8%
5%
Fixed-line penetration (population)
17%
18%
Internet services:
Total No. of fixed internet subscribers
4.0 million
5.0 million
Annual growth
33%
20%
Fixed internet penetration (population)
1.7%
1.9%
Internet household penetration
4%
5%
Mobile services:
Total No. of subscribers
259 million
300 million
Annual growth
18%
16%
Mobile penetration (population)
107%
122%

(Source: BuddeComm)


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
3.2 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 Fixed Network Operators
4.1 General Overview of Operators
4.2 PT Telkom Indonesia
4.2.1 Overview
4.2.2 Statistics
4.2.3 Corporate structure and privatisation
4.2.4 Strategic development
4.2.5 Background: the KSO partnerships
4.3 PT Indonesian Satellite Corporation (Indosat)
4.3.1 Overview
4.3.2 Corporate structure and privatisation
4.3.3 Statistics
4.3.4 Fixed-line business
4.3.5 Strategic developments
4.4 PT Satelit Palapa Indonesia (SATELINDO)
4.5 PT Bakrie Telecom
4.5.1 Overview
4.5.2 Statistics
4.5.3 Corporate structure
4.5.4 Strategic development
5. Telecommunications Infrastructure
5.1 National infrastructure
5.1.1 Overview
5.1.2 Background to development
5.1.3 Fixed-line statistics
5.1.4 Infrastructure development
5.1.5 Joint operating service (KSO) ventures – five-zone plan
5.1.6 Rural telephony
5.1.7 Wireless Local Loop (WLL)
5.1.8 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
6.1.1 Market survey
6.2 Internet statistics
6.3 Social Networking
6.4 Voice over Internet Protocol (VoIP)
6.5 Regulatory developments
6.5.1 Indonesian Internet Agency (LII)
6.5.2 Domain names
6.5.3 Internet information control
6.5.4 Cyber laws
6.6 Internet infrastructure
6.6.1 Telkom’s national IP backbone
6.7 ISP market
7. Broadband Market
7.1 Overview
7.1.1 Broadband statistics
7.2 Broadband market background
7.3 Broadband service providers
7.3.1 TelkomNet
7.3.2 Indosat Mega Media (IM2)
7.3.3 First Media
7.4 ID-WiBB
7.5 High-Speed Broadband (HSBB) project
7.6 Wireless broadband
7.6.1 Background
7.6.2 WiFi hotspots
7.6.3 WiMAX
7.6.4 LTE / Fourth Generation (4G)
7.6.5 RIM’s Blackberry
7.7 Internet via satellite
8. Digital Economy/Digital Media
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
9.2 Background to market development
9.2.1 Foreign ownership regulations
9.2.2 Temasek and anti-monopoly ruling
9.3 Mobile technologies
9.3.1 GSM
9.3.2 Code Division Multiple Access (CDMA)
9.3.3 General Packet Radio Service (GPRS)
9.4 Third Generation (3G) mobile
9.4.1 Initial licensing process
9.4.2 Second 3G auction
9.4.3 Launch of 3G services and beyond
9.4.4 Expansion and marketing of 3G services
9.5 Mobile voice services
9.5.1 Prepaid
9.5.2 Satellite mobile
9.6 Mobile data services
9.6.1 Short Message Service (SMS)
9.6.2 Multimedia Messaging Service (MMS)
9.6.3 Mobile TV
9.6.4 Blackberry
9.6.5 Mobile advertising
9.6.6 Mobile banking
9.6.7 Village Phone Program (VPP)
9.7 Major mobile operators
9.7.1 Mobile statistics
9.7.2 PT Telkomsel
9.7.3 PT Indosat
9.7.4 XL Axiata (formerly PT Excelcomindo Pratama)
9.7.5 PT Sampoerna Telekomunikasi Indonesia (STI)
9.7.6 Axis (formerly Natrindo Telepon Selular)
9.7.7 PT Hutchison CP Telecommunications
10. Forecasts
10.1 Forecasts – fixed-line market: 2015; 2020
10.2 Forecasts – internet services – 2015; 2020
10.3 Forecasts – mobile market: 2015; 2020
11. Glossary of Abbreviations
List of Tables, Charts and Exhibits
Table 1 – Country statistics – 2011
Table 2 – Telephone network statistics – 2011
Table 3 – Internet user statistics – 2011
Table 4 – Broadband statistics – 2011
Table 5 – Mobile statistics – 2011
Table 6 – National telecommunications authorities
Table 7 – Indonesia’s real GDP growth rate – 2006 - 2013
Table 8 – Major fixed-line operators - subscribers – 2009 - 2011
Table 9 – PT Telkom’s fixed-line subscribers – 2004 - 2011
Table 10 – PT Telkom’s fixed lines in service – 2007 - 2011
Table 11 – PT Telkom – postpaid and prepaid fixed wireless subscribers – 2011
Table 12 – PT Telekom – fixed wireless pre and postpaid ARPU – 2004 – 2011
Table 13 – PT Telkom – revenue contribution by market segment – 2011
Table 14 – PT Telkom’s subscribers by segment – 2011
Table 15 – PT Telkom – fixed wireless subscribers – 2003 – 2011
Table 16 – PT Indosat – fixed wireless subscribers – 2006 - 2011
Table 17 – PT Indosat – fixed wireless pre and postpaid ARPU – 2006 - 2011
Table 18 – PT Indosat – revenue contribution by market segment – 2009 - 2011
Table 19 – Bakrie Telecom subscribers – 2004 - 2011
Table 20 – Bakrie Telecom – postpaid and prepaid fixed wireless subscribers – 2009 - 2011
Table 21 – Bakrie Telecom’s pre and postpaid ARPU – 2004 - 2010
Table 22 – Fixed-line subscribers and teledensity – 1995 - 2012
Table 23 – Fixed lines subscribers and annual change by operator – 2011
Table 24 – Fixed wireless v. wireline subscribers – 2011
Table 25 – Planned five-year USO deployment of lines for villages – 2006 - 2010
Table 26 – Fixed-wireless (WLL) subscribers – 2003; 2007 - 2011
Table 27 – Fixed-wireless (WLL) subscribers by operator – 2011
Table 28 – PT Telkom’s fixed wireless subscribers – 2003 - 2011
Table 29 – PT Telkom – fixed wireless subscribers – 2010
Table 30 – Internet users – 1998 - 2012
Table 31 – Internet subscribers – 1998 - 2012
Table 32 – Dial-up internet subscribers – 2004 - 2011
Table 33 – Total international internet bandwidth – 1998 - 2011
Table 34 – Households with internet access (%) – 2005 - 2011
Table 35 – Domain name registrations – June 2010
Table 36 – Internet licences by licence type – 2007
Table 37 –TelkomNet’s dial-up internet subscribers – 2004 - 2011
Table 38 – IndosatNet’s dial-up internet subscribers – 2010 - 2011
Table 39 – Fixed broadband subscribers – 2000 - 2012
Table 40 – DSL subscribers – 2001 - 2011
Table 41 – Broadband subscribers and households - 2011
Table 42 – PT Telkom’s broadband subscribers – 2004 - 2011
Table 43 – Key broadcasting statistics – 2011
Table 44 – Overview of Indonesia’s TV market – 2010
Table 45 – Broadcasting sector, TV households and home satellites – 1997 - 2011
Table 46 – Television audience share by operator – 2009
Table 47 – Pay TV subscribers – cable and satellite – 2001 - 2011
Table 48 – TelkomVision subscribers – 2007 - 2011
Table 49 – Mobile subscribers – 1995 - 2012
Table 50 – CDMA mobile operators and subscribers – March 2011
Table 51 – 3G mobile operators and subscribers – March 2009
Table 52 – Prepaid subscribers – selected mobile operators –2011
Table 53 – Major mobile operators and subscribers – 2011
Table 54 – Subscribers and market share by operator – 2011
Table 55 – Telkomsel subscribers – postpaid, prepaid and market share – 1999 - 2011
Table 56 – Telkomsel post/prepaid ARPU – 2011
Table 57 – Telkomsel subscribers – postpaid and prepaid – 2001 - 2011
Table 58 – Telkomsel prepaid subscribers as proportion of total – 2002; 2004; 2009 - 2011
Table 59 – PT Indosat mobile subscribers – 2005 - 2011
Table 60 – PT Indosat postpaid and prepaid subscribers – 2011
Table 61 – PT Indosat postpaid and prepaid ARPU – 2008 - 2011
Table 62 – Telkomsel’s wireless broadband subscribers – 2010 - 2011
Table 63 – XL Axiata mobile subscribers – 2005 - 2011
Table 64 – PT Sampoerna (STI) subscribers – 2007 - 2009
Table 65 – SmartFren subscribers – 2010 - 2011
Table 66 – Mobile-8 subscribers – 2004 - 2011
Table 67 – Smart Telecom subscribers – 2007 - 2011
Table 68 – Axis Indonesia subscribers – 2008 - 2011
Table 69 – Hutchison CP subscribers – 2007 - 2011
Table 70 – Forecast of fixed line subscribers and penetration rates – 2015; 2020
Table 71 – Forecast of Internet subscribers and penetration rates – 2015; 2020
Table 72 – Forecast of mobile subscribers and penetration rates – 2015; 2020
Chart 1 - Fixed-line subscribers and teledensity – 1995 - 2012
Chart 2 – Internet subscribers and annual change – 2003 – 2012
Chart 3 - Mobile subscribers and penetration – 2003 - 2012
Chart 4 - Subscribers and market share by operator – 2011
Exhibit 1 – Major shareholder categories in PT Telkom – December 2011
Exhibit 2 – Major shareholders in PT Indosat – September 2011
Exhibit 3 – Palapa Ring Project – specification of rings
Exhibit 4 – Indonesian satellites – 2011
Exhibit 5 – Major FTA television broadcasters, ownership, launch date and coverage

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