Notes

Indonesia’s Increasing Mobile Market

Indonesia is the fourth most populous country in the world. As a home to almost 250 million of citizens with more than half of it composed of socially-inclined young generation, Indonesia is a highly attractive country for telecommunications services. The three top telecommunication companies, Telekomsel, Indosat and XL Axiata has been tagged as some of the most successful in their field to cater millions of subscribers. The integration of XL Axiata with Axis Capital Group strengthened the potential of the industry.

While the industry has far outpaced the archipelago’s GDP growth in the recent years, the market remain under penetrated. Providing fast and reliable connections across the vast archipelago is a significant logistical challenge, but also a tremendous business opportunity for network and service providers as well as companies offering consulting, training and other auxiliary support.

Despite the differing coverage in each island, mobile market is still fast pacing. Jakarta, not surprisingly, holds the most number of subscribers.

Fast mobile network is reviewed to be one efficient way of Indonesia to catch up with other developing nations. They even provide strong coverage to less populated areas by building satellite-based outputs in key locations. This reflects in subscription numbers, where some 310 million cellular subscriptions at the end of 2013 (up 12.4% from 276 million customers a year earlier) dwarf fixed-line and fixed-wireless subscriptions. Continued economic growth is driving both demand for and affordability of cellular services, which points to further upward potential in the world's fourth-most populous country. Unlocking this potential, however, requires substantial network investment. With the number of mobile subscriptions already far surpassing the country's entire population, operators are focusing their marketing efforts on increasing volumes per customer rather than growing their customer base.

The competition among mobile operators has become fiercer in each succeeding promotion and new service. Even the prices are not far from each other. The big three: Telkomsel, Indosat and Axiata are also facing threats from scammers on their data base. These scams are predicted to have been made by small operators who have realized the increase of mobile market through the years.

Building brand loyalty and retaining customers is a key challenge for operators, which are exploring ways to combine their connection services with content providers, such as social media. The high proportion of users accessing online services through cellular devices means internet services in Indonesia need the telcos as much as the telcos rely on content services to generate data traffic.