Frost & Sullivan analysis on Opportunities and Challenges for 2012 Mobile Commerce in Digital Lifestyle in Indonesia - presented by Iwan Rachmat, Senior Consultant, ICT Practice, Frost & Sullivan Indonesia at MobileMonday, Feb 13 2012.
Recent development… •In 2010, the wireless SIM-based penetration rate was 97.3% •Average Indonesian held 1.68 SIM cards, resulting in a unique subscriber penetration rate of only ~60% •Only ~13% of 3G enable smartphone from the total handset market* • Service providers bundling end user devices with subscription plans with lowering subscription fee •Trending down internet-able device price such as dongle, netbook, tablets*Nomura, September 2011
What we are projected going forward… Expected internet penetration rate in Indonesia by 2015 from 37% 14% in 2010 53% Indonesian mobile internet users aged between 18 and 27 Indonesian mobile internet user rank highest among the world 633 in mobile browsing intensity (pages per month per person) 107% Expected mobile penetration rate in 2015 from 97% in 2010 (SIM) 80% Mobile phones sold in 2010 were internet enabled Source: Frost & Sullivan
If we see Indonesia in the Region… Double digit growth a thing of the pastNear saturating market for penetration rate coupled with reducing ARPU is limiting the revenuegrowth Mobile Revenue & Penetration Rate APAC, 2010 16.0% India 14.0% 2010 Mobile Revenue CAGR (%) 12.0% Mobile Revenue CAGR (2009-2015) 10.0% Bangladesh Cambodia 8.0% Indonesia 6.0% China Pakistan Vietnam Philippines Malaysia Hong Kong 4.0% Sri Lanka Thailand Singapore South Korea Australia 2.0% New Zealand Japan Taiwan 0.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0% 180.0% -2.0% 2010 Mobile Penetration Rate (%) 6 Source: Frost & Sullivan
Where we are now ….Critical mass is achieved with slowing-down growth rate Mobile Subscription Penetration Rate - SIM (%) CAGR: 6.57% 153.8 111.9 Mobile Subscriber Growth Rate (%) 12 Base Year (2011) Projections (2016) 4 Base Year (2011) Projections (2016) Source: Frost & Sullivan
…And what next….Industry needs other source of growth where “voice” is tapering down Mobile Revenue Annual Growth Rate (%) 11.2 5.4 Mobile Data Penetration Rate (%) 61.2Base Year (2011) Projections (2016) CAGR: 24.09% 20.8 Base Year (2011) Projections (2016) Source: Frost & Sullivan
“Everything” is online… are we ready?As of 2010, wireless broadband penetration rate of approx. 2.5% but is expected toreach around 79% by 2015 driven mainly by “small-screen” mobile Internet Penetration (Mn) 105 90 20.1% 74 CAGR 61 50 2011 2012E 2013E 2014E 2015E Source: Frost & Sullivan
Indonesia amongst others in the RegionWhile lags behind other countries, coverage expansion & speedimprovement in major cities are increasingBB Penetration (fixed & wireless Mobile Data Average & Peak dongles as % of pop) Broadband Speed (Kbps) Avg Kbps Peak Kbps 7,792 37.9% 7,139 2010 4,990 13.3% 1,086 1,071 1.9% 518 Singapore Malaysia Indonesia Singapore Malaysia Indonesia While fixed and mobile internet penetration is still relatively low, we are now can find many hotspots in metropolitan areas – most of them are free for use Source: Frost & Sullivan, ITU, Internetstats, AMDA
M- Commerce Overview Handset OS Indonesia Nokia S40 7.49% Symbian OS 27.89% Broadband Penetration: 6% 9.50% (June, 2011) MTK / Nucleus OS Sony Ericsson OS Internet Penetration: 16% (June, 2011) Samsung OS 24.62% GDP per Capita (2010) : US Dollar 2885 25.51% Blackberry OS Others Mobile ads medium/ Mobile Ads/ Content Carriers channel 3.86% 0.40% 0.01% CDMA Operators 1.00% 5.31% Mobile Content Hutchison - 3 5.45% 10.58% 29.74% Glamour & Dating Entertainment & Lifestyle Indosat 9.05% 23.24% myGamma & Community Axis 15.20% Search/ Portal/ Services 26.86% Telkomsel Internet 16.86% Information Telkomsel 18.69% Premium Portals Others XL Axiata 33.74%Source:Buzz City “ A QUARTERLY BRIEFING ON THE MOBILE INTERNET” Oct 2011
The Journey… to “Everything Online” Internet development in Indonesia is quite recent – spurred by social networking “Mobile Commerce” “Social Media” To offer goods… To share… To find merchandise… To express opinions… To advertise… To be a community member… To do payments…“Need to be connected” To contact somebody… To make appointment… To find information….
How big is the market… Indonesia has a very small online market revenue but potential for growth is there…Online Commerce Market Size, 2010 (USD Mn) Mobile Commerce Revenue Projection (USD Bn) 1.03 Ads 67% $8, 39% CAGRGaming$11, 54% 0.1 Video/music $2, 7% 2010 2011 2012 2013 2014 2015 • Indonesia potentially reach 10 times its current m-commerce industry value by 2015 with the proper ecosystem and infrastructure, technology, & regulatory Source: Frost & Sullivan
How big is the market…Indonesia’s growth will likely be fuel by rise in mobile internet users Internet Users Forecast (Mn) Online Ad Market Size Forecast (USD Mn) 125 145.2 29.7% 73.3% 39.6 8 2010 2015 2010 2015 M-Payment Operator Revenue(USD Bn) 2.1 33.2% CAGR 0.5 2006 2007 2008 2009 2010 2011 Source: Frost & Sullivan
Some key takeaway…Based on Indonesia mobile-centric market, “mobile content” is still limited by bandwidth availability- they fit more into small-screen applications rather than band-width hungry apps. Indonesia broadband market is predominantly “mobile” centric to access Big screen voice & data content. Rich content is more likely goes through big screens. vs. small RBT, video clip, games are booming within mobile ecosystem while video streaming is more through PC/ netbook. Current market is keen of video clip, music, & games download through Full video mobile phones while full video is not feasible due to sub-optimal network vs. clips quality (long-wait or fail to load) i.e. high bandwidth/ capacity requirements to have ideal ecosystem for streaming rich content Rise on For Indonesia alone, the impression is the world’s second largest, after India, with digital ads a total impression of 3.76 billion and is one of four countries that have advertising impressions in total more than 1 billion in one quarter (BuzzCity, July 18th).