The Indonesian Telecommunication Industry

The Indonesian Telecommunication Industry “Mobile Monday” Jan 25, 2011 January 2011 Developed by ICT Consulting Practice Frost & Sullivan Asia Pacific 1

Needs to be connected… 2

Industry Updates- 2010• Indonesia is the 3rd largest wireless market in Asia, behind China and India in terms of number of subscribers that by end of 2010 Indonesia had an estimated 235.8 Mn wireless subscribers• SIM Penetration of approx. 96.9% (58% unique subs) compared to 103.6 Mn and a penetration rate of 44.2% at the end of 2007 Source: Frost & Sullivan 3

Industry Updates- “Everybody needs one” 234.4 237.5 240.4 243.3 Population 103.6 162.9 194.2 235.8 Wireless Subs. CAGR 2007-2010 31.5% Penetration (in „000) 2007 2008 2009 2010 Source: Frost & Sullivan 4

ARPU- How low can we go? 2010 Blended ARPU (USD) 2006 7.2 2007 6.9 2008 4.6 2009 3.7 Source: Frost & Sullivan 5

Voice & Data Market Revenue- Data Service is onthe Rise 3.5% 7.0% 7.4% Total Rev. Growth 2007 2008 2009 2010 USD Million Source: Frost & Sullivan 6

Fixed Broadband- Indonesia lags behind in APACmarket 2010 Fixed Broadband Household Penetration Rate Source: Frost & Sullivan 7

Wireless Broadband- Broadband is fueled bymobile wireless 2010 Wireless Broadband Penetration Rate Source: Frost & Sullivan 8

Key Points 2010- Voice is flattening, data is onthe rise• High “SIM” penetration of 97% by 2010 represents unique subscribers penetration of 58%- plenty room to go, it is commoditized and becoming “hygiene” factors• 53% of the market is still on 3G while the rest are on 2.5 or 3G- in terms of “data services” this is our next segment to go• Indonesia‟s blended ARPU stood at US$3.33 in 2010 & expected to go down to USD$ 2.99 by 2015- operators have to anticipate to cater for huge network capacity for expected high minutes (MoU/ sub.) from 170 minutes in 2010 to 194 minutes in 2015• Combination of flattening voice revenue & increasing data-services revenue- in combination, how to sustain the business?• “Internet” or data service fever are on the rise however the penetration is nascent with 17% wireless broadband• Business challenge: High network capacity requirement , low incremental revenue take up, & high cost of spectrum/ license fee 9

Wireless Subscribers- Outlook 80.8% 96.9% 108% 119% 129% 136% %Penetration 2009 2010E 2011E 2012E 2013E 2014E Source: Frost & Sullivan 10

Wireless Market Revenue- Outlook CAGR 2010-2014 9.09% CAGR: 18.9% CAGR: 2.93% 2010E 2011E 2012E 2013E 2014E USD Million Source: Frost & Sullivan 11

Broadband Subscriptions- Outlook %penetration 17.4% 22.9% 31.0% 37.6% 46.2% CAGR 2010-2014 29.2% 2010E 2011E 2012E 2013E 2014E (in „000) Source: Frost & Sullivan 12

2011 – Where are we going next?• Indonesia has already shown a strong inclination towards smartphone use, with close to 3 Mn BlackBerry handset users in the market• 2nd largest “facebook” after the USA and “Twitter” worlds highest penetration rate at 20.8% - the demand is huge, now it is left to the business to fulfill the gap• To answer key question on “data” business: How to monetize data services in the midst of “free” society and keep business‟ profitability?• To deliver quality & reliability of data services- be it fixed or mobile• The Indonesian government estimates that it will need an additional 150,000 to 200,000 towers over the next five to seven years, each costing roughly US$100,000- another area of operators‟ diversifications• “Human capital” or people side of the business, most of the time is “second in priority”- are the resources ready for the next business era? 13

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About Frost & Sullivan 15

The CEO‟s Top Objective is Growth• 93% consider “Growth” the top objective for the next five years• 63% are dissatisfied with the level of growth their organization is achieving CEO dissatisfaction with level of company’s growth • 56% feel internal challenges to growth are greater than external challenges • 82% feel it is tougher each year to hit their growth plan • 80% do not have confidence in their organization’s abilities to conduct a growth analysis Source: CEO Choice Growth Survey Results 16

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Frost & Sullivan The Growth Consulting Company• Founded in 1961 • APAC Presence for over 15 years• Over 1,700 Consultants / • Regional presence in APAC with over 500 Consultants and Industry Analysts across 37 global locations Experts through 17 offices• Over 10,000 Clients Worldwide • Strong relationships with Global including majority Fortune 500 MNCs and regional SMEs in APAC companies and key players in the Investment Community 18

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Broad Based Industry Categories Industrials Automotive ICT Electronics & Security Mechanical Power Powertrain & Alternative Enterprise Communications, Electronic Devices, Transmission, Fluid Power, Propulsion, Chassis, Modules Telecoms Services, Mobile & Components, Machinery, Process Control & Systems, Safety & Driver Wireless Communications, Semiconductors, Surface Equipment, Industrial Assistance, Navigation & smart cards, Network Mount Technology, Contract Automation and Software, Infotainment, Electronics, Security, Contact Centre. Manufacturing, AutomaticLasers & Robotics, Computer Software, Aftermarket, Enterprise Software, Satellite Identification and Security, Aided Design Garage Services and & Space Comms, IT Biometrics Equipment Applications and Services, Network Infrastructure Healthcare Energy & Power Environmental Measurement & Medical Devices and Surgical Systems Products InstrumentationInstruments, Drug Discovery, Power Generation, & Services Test & Measurement, Clinical Diagnostics, Transmission & Distribution Sensors, Inspection Services, Pharmaceuticals, Medical Decentralized Energy, Water & Wastewater, Non-destructive Testing, Imaging, Patient Monitoring Power Supplies, Energy Waste Management, Air Laboratory & Analytical and Telemedicine Services Treatment, Environmental Instruments Batteries, Renewables & Health & Safety, Personal Alternatives, Power Quality Protective EquipmentAerospace & Defense Chemicals, Materials Transportation Building Technologies Civil and Commercial & Food Ingredients & Logistics & Services Aviation, Aircraft & Engine Performance Materials, Logistics & Distribution, Heating, Venting, AirMRO, Airport Infrastructure, Plastics & Polymers, Warehousing, Supply-chain Conditioning & Cooling, Battlespace IT, C4ISR, Packaging, Paints, Coatings Management, Lighting, Electronic Security, Military Aerospace, and Inks, Adhesives & Transportation Systems, Building Automation & Training & Simulation, Sealants, Specialty & Fine Rail Logistics, Ports & Marine Controls, Facilities Homeland Security Chemicals, Food Ingredients Management & Services 21

Partial List of ClientsSome of the leading companies in ICT have used our service to understandmarkets and to help shape their strategies Asia Pacific Operators Vendors Agencies and Regulators 22

For Additional Information Dewi Nuraini Iwan Rachmat Senior Cosultant, Corporate Communications Information & Communication Technologies Indonesia Indonesia Phone : (021) 571.0838 / 571.3246 Phone : (021) 571.0838 / 571.3246 Email : dewi.nuraini@frost.com Email : iwan.rachmat@frost.com www.frost.com 23

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The Indonesian Telecommunication Industry

by Frost & Sullivan on Feb 07, 2011

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The Indonesian Telecommunication Industry — Presentation Transcript