I visited Indonesia, January 22-24th to study 3G multimedia services evolution.Indonesia, is the world’s 4th most populous country after China, India and the US, with 245 million people on a territory counting 13,000 islands spread 5000 km wide. But , Indonesia has one of the least-developed communications systems in Asia.
2G mobile penetration under 30%, 3G deployed in cities
Mobile penetration is below 30% and concentrated in urban areas (50% penetration in Jakarta, 40% in other cities). This compares with 80% in Malaysia and 40% in the Philippines.
There are good signs though as mobile growth exceeded 40% in recent years, with a forecast of 120 million subscribers by 2010, and a further 25 million fixed wireless access (FWA) subscribers. One of the growth drivers is the decline in handset prices priced at $30 to $40, and refurbished units at $10 to $20. Telkomsel has 96% pre-paid and operators report a blended monthly ARPU of $9 including $2.40 for data. Indosat and Excel have reported 5-7$ prepaid ARPU and $23 postpaid. In 2007, minutes of usage grew to 52’ this compensates ARPU decline.
Five 3G licenses were auctioned in 2006 to Telkomsel, Excelcom, Indosat and in 2004 to Hutchinson, Natrindo. Hutchinson and Natrindo have 15MHz spectrum each , Telkomsel, Indosat and Excelcomindo existing GSM operators received 5MHz. Telkomsel has deployed 3G/HSDPA with 1500 Node B out of 19.000 BTS. This network covers 49 cities in Java, Sumatra, Kalimantan and Sulawesi . Telkomsel has 3.5 M active 3G subscribers and expects to get 18 million 3G users by 2010. This required an investment of $1.5 billion in network expansion in 2007. It is expected that all GSM operators will continue to invest on 3G network coverage expansion in 2008. Uptake of 3G services is slow because 3G handset pricing is not affordable enough to attract users.
Mobile operators duopoly challenged in 2008
With Telkomsel and Indosat, controlling 74% market share , mobile prices in Indonesia remained high because of inadequate competition. The Herfindahl-Hirschman Index, measures Indonesia’s mobile market concentration at 5,082 (1,800 indicates a highly concentrated market). The competition watchdog (KPPU)ruled in November 2007 that Telkomsel had broken the anti-monopoly law by establishing a price cartel with Indosat in Indonesia. The entry of Hutchison and Maxis in 2008 will bring in a price war and downward pressure on mobile calling prices.
In the context of the forthcoming 2009 presidential election, the debate has evolved to that of foreign investment in Indonesia's mobile telephone sector. Economic nationalism views seem dominant in response to globalization. Singapore’s SingTel Group owns 35 % of Telkomsel (65 % by Indonesian government) and Singapore’s Temasek, owns 31% of Indosat through a subsidiary (Asia Mobile Holdings, 15 % is owned by Indonesian government) . Telekom Malaysia owns 60% and Malaysia’s Khazanah 17 % of Excelcomindo. Saudi Telecom owns 51 % of Natrindo (Lippo Telecom).
More than 10 mobile players
PT Telkomsel, Indonesia's largest cellular operator by subscribers, controls 52% of the market. PT Indonesia Satellite has around 27%, and PT Excelcomindo Pratama around 16%. The remainder is held by city operators like PT Bakrie Telecom and PT Mobile-8.
Source : telkom.info
- Telkomsel (TSEL )
52% market share
kartuHALO 1.9M +16% (pre-paid)
simPATI 22M + 9% (postpaid)
KartuAs 20M + 94% (postpaid)
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum - Indosat(ISAT,NYSE: IIT)
16% market share
27% market share
Matrix (GSM pre-paid)
Mentari (GSM postpaid)
IM3 (GSM Prepaid, multimedia)
Indosat 3.5G (GSM/UMTS/HSDPA)
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum
(updated Dec 2008) - Excelcomindo (XL)
16% market share
Xplore (pre-paid)
Bebas (postpaid)
Jempol (postpaid)
XL is a Vodafone partner network
GSM 900Mhz, 1800Mhz and 1900Mhz, WCDMA 5MHz spectrum - Mobile-8 Telecom
4% market share
Fren (post-paid and pre-paid)
CDMA 800Mhz, CDMA2000/EV-DO services since 4Q06 , only covers west and some cities in middle Java
Subsidizing data cards to customers - Bakrie Telecom
2% market share
ESIA (postpaid and pre-paid)
Fixed-wireless Access, nationwide
CDMA 800Mhz - Hutchison Telecommunication
0% market share
3/Three (postpaid and pre-paid)
GSM 1900Mhz and W-CDMA launched 2Q 2007, 15MHz spectrum
Services will cover 67 cities on Java Island in 2008 and expand to the islands of Sumatra and Bali. Targeting 1 million subscribers and driving adoption of mobile email, MMS and other data services to generate data revenues. Hutchison has been active in both on-net and off-net promotions, having reduced on-net tariffs by up to 50% - Natrindo Telecom (Maxis)
0% market share
(Lippo Tel)
GSM 1900Mhz , 10MHz W-CDMA license in 2004 . - Sinar Mas Telecom
Controlled by billionaire Eka Tjipta Widjaja
0% market share, target 700,000 subscriber in 2007
SMART (postpaid and pre-paid)
GSM 1900Mhz - Sampoerna Telecom
0% market share
Ceria (postpaid)
CDMA 450Mhz, launched EVDO services in 2H07, with only a small coverage - Star One (post-paid and pre-paid)
0.3% market share
Fixed-wireless Access, nationwide
CDMA 800Mhz - Telkom
6% market share
Flexi (postpaid and pre-paid)
Fixed-wireless Access, nationwide
CDMA800Mhz
3G services launched
3G may not appear a priority in emerging markets but one can argue that HSDPA will take-up in Indonesia simply because of pent-up demand for internet access. In 2005, there were only 10.3 million internet users, 0.05% of the population and in 2007, Telkom has only 210’000 ADSL subscribers. 3G data cards may be an option for internet access at 300Kbps.
In addition, operators such as Telkomsel will introduce 3G infotainment services on their web site :
Telkomsel Mobile TV can be accessed using circuit-switched video calls to short numbers :
8800 Video Portal
8801 Metro TV
8806 SCTV
8809 Indosiar
8811 O Channel
8810 SpaceToon
8817 Bali TV
8829 Makasar TV
Video content from content providers including SCM, Metro TV, Bizcom Elasitas and 160 local and foreign providers is also distributed from the WAP portal offering video-on-demand streaming and video downloading. Telkomsel is hoever generating less than 0.5% of ARPU with video.
I noted with interrest that Telkomsel is promoting video calls
Video SMS : video call to 3605
MOVie : Make your Own Video video blog service; 0.05$/min call
Video Call Conference Video Call to 3604; 0.05$/min call, 0.5$ for ID-PIN registration by SMS
