Indonesia has the 4th largest mobile market in the world with 278 million subscribers. It also has a large 3G market, with many users skipping fixed broadband for mobile. The mobile operators Telkomsel, Indosat, and XL Axiata dominate the market, though they have significant foreign ownership. Mobile internet usage is growing rapidly, with internet users expected to more than quadruple by 2016, driven primarily by smartphones and mobile data usage. The telecommunications industry provides many opportunities around enterprise services, e-commerce, digital advertising, and increasing data consumption.

1. CONSULTING ASSIGNMENT
2013 -2014
CONSULTING ASSIGNMENT
2013 -2014
Indonesia’s Telecom Market
Indonesia is the 4th largest mobile market(278 million
subscribers) in the world. It is also in the world’s top ten
3G markets, with broadband users skipping fixed
connections and going straight to mobile. The mobile
operators are key players in the internet sector for the
high usage of Smartphone, though 2.5G mobile
technology are still there. Fixed broadband lines features
the top layer of the market, targeting businesses and
high-end consumers.
The Indonesian mobile telecommunication industry is
dominated by three main players namely state owned
enterprise Telkomsel ,Indosat which is also partly state
owned and XL Axiata which is a private sector company
however all three companies have significant foreign
shareholdings.
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2. CONSULTING ASSIGNMENT
2013 -2014
Indonesia Services Snapshot – Telecommunication
By 2015, mobile subscribers in Indonesia will be 391 million. With 9 Mobile Network
players and considerable 98% of prepaid services in the mobile telecom sector.
 Internet users in Indonesia is expected to increase from 40 million to 175 million by
2016
The total number of Internet users in the so-called BRIC nations — Brazil, Russia, India
and China — But, Indonesia is expected to double it to 1.2 billion by 2015.
 The number of SIM cards usage in Indonesia will top 100 % of the population by 2015,
although some users expected to have multiple devices.
 Surprisingly, only12 %of Indonesians use the Internet and only 5 % use computers. But
users are expected to triple by 2015.
 20 % of Indonesian mobile phone users have multiple SIM cards. Out of these, 9% have
two phones for personal use. Use of mobile E-mail and mobile payments and eCommerce is highest in Indonesians.
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CONSULTING ASSIGNMENT
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2013 -2014
Key Strengths of Indonesia’s Telecom
Indonesia have shown strong economic growth with increasing wireless penetration, indicating a
point of saturation in telecom industry
Indonesia’s economic GDP have rise up to 6.3% in 2013 and expected to grow up to 6.5% by
2014-17.
Enterprise ( BPO, ICT & Managed Services) Industry will see higher growth at around 8% in 201417.
 Indonesia: 3rd largest wireless market in Asia Wireless Penetration driven by SIM
Internet penetration is driven by mobile internet services (20%penetration of wireless broadband)
with strong inclination towards Smart devices.
Indonesia Future growth of revenue will be driven by higher consumption of data services.
Stabilization of Data ARPU indicates future growth potential. Growth Strategy: Revise investments
in data. Focused CAPEX investments to fuel future growth potential
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Key opportunities
The significant market growth translates into business opportunity for mobile operators and companies
providing Internet-based services to consumers and enterprise, including:
Huge Opportunity in enterprise services:
BPO Services: Strong offload potentials from Philippines for certain process
Domestic Call centers like info media looking to expand
Overseas players like Aegis scouting for opportunities
ICT Managed Services: Data center investments by International Players
Next Generation data centers to support cloud computing
System Integration: Spending on ERP is the key driver
Fragmented Market
Operators focuses on BFSI vertical
Increase in E-commerce can potentially be $1.5 bn + market by 2015.
Ecosystem enablers: Mobile Payment mechanisms still a concern in Indonesia
Issues in regulation. Revise advance electronic payment solutions (E-Payment)
Rise on Digital ads: For Indonesia alone, the impression is the world’s second largest, digital ads after
India, with 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.
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2013 -2014

5. CONSULTING ASSIGNMENT
Industry Trends
Revenue
EBIDTA
CAPEX
Service
portfolio
2013 -2014
Recommended Initiatives
• Voice revenue growth is tapering as market is getting
matured; but still scope of market penetration
• Operators needs to renew their focus on data services
•Market growth evaluation
•Product pricing evaluation
• EBIDTA margins getting stabilized in the industry
• Renewed focus on reduction in OPEX
•Cost take out imitative in ops
•Business Process Reengineering
• Increased CAPEX to be inline with increase in data
services in terms of capacity (from 2G to 3G/LTE)
• Imitative to increase the cellular coverage
•Market assessment for data services
•Competitor assessment
• Increasing shift towards prepaid services
• Growing uptake on VAS services (m-payments)
•M-payment growth strategy
•Supply chain optimization in prepaid
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APPENDIX - I
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APPENDIX - II
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Citation
Wikepedia
Frost and Sullivan
Analysys Mason
Badan Regulasi Telekomunikasi Indonesia (BRTI)
 Asosiasi Telekomunikasi Seluler Indonesia (ATSI)
KPMG Indonesia
Deloite TMT 2013
 ITU Telecom
Information and Communications Technology Indonesia
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9. CONSULTING ASSIGNMENT
COMPILED BY ASHUTOSH PANDEY
2013 -2014
CONSULTING ASSIGNMENT
2013 -2014