Investment in indonesia what are the upcoming opportunities.ict

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Investment in indonesia what are the upcoming opportunities.ict

  1. 1. Investment in Indonesia: What are the upcoming opportunities ? Investment Opportunities in: ICTInfrastructure Leap = Investment Potential Jayesh Easwaramony Vice President ICT Practice
  2. 2. Key ICT trends 2
  3. 3. Indonesia Market: Bracing for next wave Strong structural factors hold promise for Indonesia; however growth will need further investments Extent S/ Key Factors Impacting of N Indonesia Impact 1. Strong economic growth driving consumer and enterprise spending ◕ ◕ Technological changes and commoditization leading to lower 2. costs of deployment e.g. Fibre, cloud computing, devices, SDR) ◑ 3. Large population base with a rich content ecosystem and popularity of ◕ latest trends 4. Supply side push to drive growth / existence of well funded corporates ◑ 5. Regulatory structure and ability to attract foreign capital ◑ Unfavorable impact ◔ Moderate impact ◑ Favorable impact ◕ 3
  4. 4. ICT Evolution Broadband Enablers Ecommerce M-payments Enterprise Services Data centers Managed ICT WAN Services Services Domestic BPO Consumer Content Cross-platform Popularity of gaming Greater localization content and social of content Pay TV networking Basic Infrastructure CreationUnderinvestment in Mobile Price War Creation of national Growth of mobilefixed line /oligopoly and explosive backbone and fibre broadband Eventualin mobile growth infrastructure in key Tower sharing consolidation metros Pre-2007 2008-09 2010-11 2012-13 4
  5. 5. Overall ICT investment themes Enterprise Services : Increase in scale and scope • Data center services • Managed services • BPO Next Wave of consumer Smart Capital for further services : Emulation of infrastructure Creation Leapfrog Indonesia other markets closer to BRICs • Value unlocking of tower • Handsets/ Mobile apps business • Lack of growth capital for • E-commerce subsidiaries / • Mobile Payments deconglomerization • Pay TV 5
  6. 6. Theme 1:Smart Capital Indonesia mobile growthIndonesia continues to be a healthy mobile revenue market compared with the 4th highestCAGR in APAC 16.0% Mobile Revenue and Penetration Rate in Asia 14.0% India 12.0% 2010 Mobile Revenue CAGR (%) 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 (%) Note: The base year is 2010. Source: Frost & Sullivan analysis. 6
  7. 7. Theme 1:Smart Capital Indonesia mobile growthMultiple drivers exist for sustained growth in mobile broadband Wireless broadband Government Sustained 1 growth 2 Initiatives 3 Economic Growth • Palapa Ring Project to ensure 2010 Wireless Broadband Penetration Rate • GDP expected to grow at a backbone connectivity 2010 Wireline Broadband Penetration Rate robust CAGR of 6% till 2015 93% • Developing ‘Desa Pinter’ – to Japan 26% • Income per-capita hitting $3,000 distribute internet access to 83% in 2010 (13% growth from 2009) South Korea 36% villages • Upper middle class has more Singapore 63% • Accelerating development of 27% than doubled in last decade – 60% broadband access with or Australia growing faster than Philippines, 26% without cable 43% Thailand and Malaysia Hong Kong 30% 33% Availability of cheap 4 5 Malaysia 12% Rise of data usage 12% smart phones & tablets Indonesia 2% • Social media integral part of life Vietnam 8% • Falling prices of branded 6% style – world’s 2nd highest user 8% phones Philippines base on Facebook, highest 3% • Increased indigenous number of tweets from APAC 5% China 9% handsets and cheap • Further growth will be fueled by Thailand 1% imports from Taiwan and 7% new apps like m-commerce, m- China India 1% payment, m-health, m-education 1% • User friendly tablets growing rapidly 7Source: Frost & Sullivan Analysts, Asian Development Bank, IMF, Bank Indonesia
  8. 8. Theme 1:Smart Capital Indonesia mobile growthMobile broadband will continue to grow in Indonesia Mobile Broadband Subscribers in Indonesia 60.0 (millions) 50.0 40.0 30.0 20.0 10.0 - 2010 2011 2012 2013 2014 2015 Large screen Small screen Multi screen 8Source: Frost & Sullivan Analysts, Asian Development Bank, IMF, Bank Indonesia
  9. 9. Theme 2:Enterprise services- increase in scale and scopeICT adoptionIndonesia needs to improve its ICT adoption Benchmarking of APAC ICT Maturity 5.0 4.5 Japan Mature Enterprise ICT adoption 4.0 3.5 South Korea Singapore maturity 3.0 Transitioning 2.5 Australia Taiwan 2.0 1.5 Emerging Malaysia 1.0 India 0.5 Vietnam Indonesia 0.0 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Mobility Maturity Mobility Maturity : Smartphone penetration in the country taken as a proxy for Mobility maturity in the country Enterprise ICT maturity: Total ICT spending by enterprises divided by the number of enterprises ( > 50 employees ) taken as a proxy for Enterprise ICT maturity adoption in each country 9
  10. 10. Theme 2: Enterprise services Market potentialThis will necessitate increase in large players to cater to the local market Drivers Contact Center  Strong offload potential from Philippines for certain processes Services/BPO  Domestic call centers like Infomedia looking to expand  Overseas players like Aegis scouting for opportunities ICT Managed Services  Huge interest in data center investments by domestic and international players  Prevention of ‘Singapore hop’  Next generation data centers to support cloud computing based approaches System integration  System integration continues to grow – ERP spending the key driver  Fragmented market  Players are niche or narrowly focused only on BFSI vertical 10
  11. 11. Theme 3: Consumer Services E-enablement of Indonesia starting nowConsumer e-enablement can potentially be $ 1.5 bn + market by 2015 Drivers E-commerce  Rakuten’s entry into Indonesia through JV  Other international players scouting for JVs – Korean and US based  Indonesia online shopping % half of Thailand Digital Content  Many app developers looking at Indonesia as a base for global development  Huge interest from local entrepreneurs  Difficulty in monetization Ecosystem enablers  Payment mechanisms still a concern in Indonesia  Mobile payments – issues in regulation Notes: Digital content excludes mobile content 11
  12. 12. Thank You

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