Cellular telecommunications in Indonesia 2011.
Cellular phone telecommunications have grown fast in Indonesia over the past 15 years marked by the number of subscribers. The number of subscribers has increased from year to year. Indonesia is the fourth largest in number of cellular phone subscribers in Asia after South Korea, China and Japan.
Currently, Indonesia has 7 operators of cellular phone using the technology of GSM (Global System for Mobile) and 4 operators with technology of CDMA (Code Division Multiple Access). Based on data at the Pots and Telecommunications Directorate General, in the period of 2006-2010, the number of cellular phone users in Indonesia grew 31% per year. By the end of 2010, the number of cellular subscribers reached 211 million, with GSM operators dominating 95% of the cellular market CDMA having a 5% market share. Pre-payment dominate 94% of payment system with post payment accounting for only 6%.
Telkomsel, with 94 million subscribers, had the largest share or 44.5% of cellular market in 2010. Cell phone market has reached rural areas even isolated areas in the country. Telkomsel service has covered all kecamatan district areas in Indonesia since 2008.
The number of cellular phone users in Indonesia has increased rapidly Teledensity has reached 91.7% in the world fourth most populous country of 230 million people, but still lower than Singapore's 100%.
The rapid growth of the business and the market potential that is still open for penetration attract more investors to the country. A number of foreign operators in Asia such as Singapore Telecommunication Ltd (SingTel), Axiata Group Berhad (formerly Telekom Malaysia) and Maxis Communication Bhd from Malaysia already established foothold in the country through acquisition of the shares of local operators including Telkomsel and XL Axiata (formerly Excelcomindo). Indosat, which was formerly a state telecommunications company, has also fallen into the hand of foreign investor. Qatar Telecom Group acquired 41% stake in Indosat from STT (Singapore Telecommunication Technologies), and 15% through tender offer. The government holds 15%.
In early 2011, the government approved additional frequency allocation of 5 MHz for 2 operators of third generation (3G) telecommunications technology PT Axis Telekom Indonesia (formerly PT Natrindo Telepon Selular) and PT Hutchison CP Telecommunication Indonesia. Meanwhile, almost all suppliers of telecommunications technology in the world have their units in Indonesia to get a share of the huge and growing market. Cellular telecommunication is one of the most dynamic service industries that require large additional investment every year. In 2011, spending on telecommunications networks is estimated to reach US$ 4.7 billion.
In facing the tight competition, some operators seek merger such as PT Smart Telecom by acquiring Pt Mobile 8. The merger of the two companies gave birth to new larger company PT Smartfren Telecom early 2011. Currently all cellular operators rely more on data service and subscribers as the main sources of income.
Cellular telecommunications system
Currently Indonesia has two systems of cellular telecommunications Global System for Mobile communication (GSM) and Code Division Multiple Access (CDMA).
GSM is a digital telecommunication technology operating on frequency of 900 MHz. In the frequency of 900 MHz, GSM has 140 slots of carrier frequency canal with a bandwidth ranging from 890 MHz--915 MHz uplink and 935 MHz--960 MHz downlink. The band width for each slot is 200 kHz. As the use of the frequency could not meet the requirement of the subscribers, given the rapid growth of the number of subscribers, the same frequency could be reused under the mechanism of frequency re-use at one BTS with a certain safe distance, is applied.
The GSM technology is widely adopted and developed in Europe. GSM is superior in many aspects over the old analog system. International Roaming could be made with GSM technology. It is not tied to one supplier; therefore, there is no monopoly. The validity of subscribers is examined before a conversation take place with the facility of hopping frequency. There would be no third party that could illegally hear the conversation. The voice quality is better and more sensitive, the subscriber capacity is larger and the features of subscribers are more varying, paging, facsimile, and ISDN.
In 1995 the government granted the operating licenses nationally for three GSM 900 operators without going through tender--Satelindo (later merged into Indosat), Telkomsel and XL Axiata (formerly PT. Excelcomindo Pratama). Currently there are 5 GSM cellular operators in Indonesia.
In order to increase the GSM canal capacity, there is now frequency of 1800 MHz (1.8GHz) or known as Digital Cellular System (DCS) 1800, a Personal Communication Network--PCN from Europe.
GSM on the frequency of 1800 MHz is generally known as DCS (Digital Cellular System) 1800 or GSM 1800 in which there are 374 carrier frequency canals that could be used to serve cellular subscribers. The canals consist of uplink: 1720 MHz--1785 MHz and downlink: 1805 MHz--1880 MHz.
The use of frequency of 1800 MHz will increase the capacity to serve GSM subscribers. DCS 1800 is generally adopted in urban areas which need large serving capacity as the number of subscribers is generally larger in urban areas. The high frequency of GSM 1800 has positive effect on services. In the same service area, GSM 1800 could provide larger connecting capacity almost three times that of ordinary GSM. However, it has negative side that it needs more units of BTS (Base Transceiver Station) than needed by GSM 900. This is because of the greater use of the frequency of GSM 1800 compared to the use of frequency of 900 MHz.
In addition, in a number of cases, GSM 1800 has some communication problems for use in some types of high rise buildings. DCS 1800 system is used by operator PT. Natrindo Telekomunkasi Seluler.
With the growing demand for mobile telecommunication services, higher frequency will be needed to serve the growing number of subscribers that is one with a frequency of 1900 and known as PCS (Personal Communication System) 1900.
PCS 1900 has smaller coverage area but has larger capacity to serve larger number of subscribers compared with DCS 1800 and GSM 900. One new GSM operator using the frequency of 1900 MHz. Is PT HutchisonCP Telecommunications Indonesia using the 3 G technology 3G in addition to GSM.
CDMA also constitutes a system of digital technology used in fixed as well as mobile telephones. The technology is adopted widely in North America.
The CDMA technology especially CDMA 20001x is known to be superior in that it produces much clearer voice and in the speed of data transfer. The superiority of GSM lies in roaming and broad usage of the technology.
The superiority of CDMA technology particularly CDMA 2000 1X lies in the quality of voice which is much clearer as the CDMA technology could remove noise to the very minimum level. The clearness of the voice is considered important in the provision of telephone service. CDMA fixed wireless telephone is equal to the wire line in the quality of voice.
CDMA 2000-1X technology has been used in many countries like South Korea, China and the United States. In Indonesia, the operators of CDMA 20001x with cellular license are PT. Smartfren Telecom (a merger between PT. Smart Telecom and PT. Mobile-8 Telecom) and PT. Sampoerna Telecommunications Indonesia. Other cellular operators hold the license as fixed-wireless operator such as PT. Telkom, PT. Indosat and PT. Bakrie Telecom.
CDMA technology is also superior in speed of data transfer. In Indonesia, the speed of data transfer of up to 153.6Kbps is used in almost all service areas but the speed of data transfer data of 2.4Mbps is only for CDMA2000 1X EV-DO networks in Jakarta.
Unlike GSM, CDMA technology tends to adopt close-standard, therefore, any one wanting to produce CDMA cellular phone must pay for the license to the license holder Qualcom. This is one of the reasons why some leading cell phone vendors refuse to do business with CDMA technology such as Siemens and Sony Ericsson. The two vendors may think CDMA not feasible with the obligation to pay for the license.
The existence of GSM technology in Indonesia is stronger as it is supported by wide networks. CDMA would take long time and need an effective strategy to beat GSM in the market, although CDMA is more competitive in price. GSM needs extra cost for installation of new equipment. However, GSM-based cellular phones are greater in number and variety than CDMA cell phones.
In late 2006, the government issued a regulation on frequency tapes for 3G. Some operators were forced to move to other frequency tapes and those stayed were required to pay. Operators of CDMA-based fixed wireless phone Indosat (StarOne) and Telkom (Flexi) for Jakarta and Banten were forced to move to frequency tape of 800 Megahertz and cooperate with other operators.
Currently Indonesia has 10 cellular operators including 5. GSM operators and 5 CDMA operators. There are three large GSM-based cellular operators Telkomsel, Indosat and XL Axiata which hold the license to operate with nationwide coverage. The three companies operate with dual band--on the frequency of 900 Mhz and frequency of 1800 Mhz hat could serve 3G technology
The first GSM operator in the country was PT. Satelit Indonesia (Satelindo), which was originally jointly owned by the Bimantara Group, Telkom and Indosat. Later Indosat and Telkom agreed on exchange of their respective shares in two subsidiaries Satelindo and Telkomsel in order to end cross ownership and to create a healthy competition. Indosat's stake in Telkomsel was sold to Telkom and Telkom's share in Satelindo was sold to Indosat that Telkomsel fell under control of Telkom and Satelindo was owned by Indosat.
In 2003 PT Satelindo and PT Indosat Multimedia Mobile (IM3 operator, a subsidiary of Indosat, were merged into Indosat for efficiency in cost. Indosat, however, maintained the cellular products of each the defunct subsidiaries Matrix card, Mentari card of Satelindo and IM3 card of Indosat Multimedia Mobile. Apart from providing GSM cellular service, Indosat has CDMA fixed wireless service called StarOne and offers international direct dial (SLI) and long distance direct call (SLJJ) and multi media service.
In 2004, Indosat in cooperation with Starhub, a sister company of Indosat in Singapore, succeeded in launching the feature of Black Berry which is a complete mobile Solution including wireless e-mail, global address lookup, wireless calendar synchronization, and mobile data, integrated and safe. The Black Berry service needs GPRS (General Packet Radio Services) networks to allow all the features to function properly. The superiority of the BlackBerry service over other wireless services is that it has push mail technology which will enable the subscribers to access e-mail without dial up first. The user of BlackBerry also will always be connected with GPRS that will allow real time data streaming.
In 2005, Indosat teamed up with Nokia to launch Black Berry Connect service through which subscribers could access the service without having to use special handset from RIM (Research In Motion). Access could be made with Nokia 9500 and Nokia 9300 handsets.
In 2009, Indosat focused more on upgrading technology rather than expanding networks with more units of base transceiver station (BTS). In 2010, Indosat promoted its 3G service by expanding service network and broadband capacity. It also started modernization of cellular networks through the application of the technology of single RAN SDR (Single RAN Radio) in the BTS broadcasting network, and prepared migration to digital Internet Protocol network. Indosat succeeded in attracting more subscribers, increasing its market shares and improving cost efficiency with the expansion program
In 2011, Indosat plans to take over control of retail broadband from subsidiary PT. Indosat Mega Media (IM2), which operates as an Internet Service Provider.
PT. Telecommunications Seluler (Telkomsel) is a subsidiary of the state telecommunications company PT Telkom. In the beginning Telkomsel was designed to function as a pilot project for GSM-based mobile telecommunications project of Telkom and Indosat, respectively with stakes of 51% and 49%. The entry of foreign partner changed the share composition in Telkomsel. Currently, Telkomsel is 65% owned by Telkom (65%) and 35% by Singapore Telecom Mobile (SingTel, 35%).
Around 50% of BTS units of Telkom are used by Telkomsel, and on the other hand around 8% of BTS units of Telkomsel are used by Telkom's Flexi service.
Telkomsel issued a bond valued at Rp 2 trillion to finance its capital expenditure in 2007. Meanwhile, PT Telkom set a budget of Rp 14 trillion for use as capital expenditures of its cellular subsidiary. The bond fund was used for business expansion to maintain its market share of at least 50%.
Telkomsel has been the market leader in cellular business in Indonesia with a market share of 50%. It has coverage of 95% of the country. It has established cooperation with 260 operators in international roaming in 15 countries Singapore, Malaysia, the Philippines, Taiwan, Australia, Hong Kong, Germany, Belgium, France, Saudi Arabia, Italy, Greece, the Netherlands, Japan, and Sweden.
Originally it was named PT. Excelcomindo Pratama (XL) and started operation in 1989. In 2005 it launched Initial Public Offering (IPO) selling 20% of its shares to the public. XL is the only cellular telecommunications company in the country using optic fiber network consisting of backbone along the right and left side of the railway track from Bandung in West Java to Surabaya in East Java to cover other big cities in Java.
In order to expand capacity and to cope with traffic jams in crowded cities in Central Java, the company has built four networks connected with the backbone. The main optic fiber in Java consists of 72,144 kbps and 216 core fiber which use synchronous digital hierarchy (SDH) to make connections with each point along the backbone and ring cables.
In September 2003, around 4,400 kilometer cable of optic network was built and in 2010 was 13,000 kilometer cable. In August 2007, network of marine cable extending between Batam and Johor in Malaysia was operation. The project called Batam Rengit Cable System (BRCS) would provide connection between XL networks in Indonesia and that of Telekom Malaysia (TM). TM would provide access to the global network for XL. The submarine optic cable network of Batam-Rengit is around 63 km long with a capacity of 48 cores. Each pair of cables (@ 2 cores) has an initial capacity of 10 GHz. With the latest technology of DWDM, a pair of cables could be upgraded to Terra Bit unit.
XL has Internet Protocol (IP)-based infrastructure networks. Around 60% of the backbone networks are IP based. In addition to the technologies of 2G, and 2.5G, XL has also implemented the technologies of 3G and 3.5 G including for FMC integration. XL is ready to enter the era of full Internet Protocol, with convergence of services of voice, data, video and broadcasting. Apart from providing cellular service, XL has the product of Business Solutions, a lease line-based corporate solution service, broadband and IP (Internet Protocol).
In December 2009, the name of the company was changed with PT XL Axiata Tbk., to follow the change in the name of its holding in Malaysia. Currently XL Axiata is 66.7% owned by Axiata Investment Indonesia Sdn Bhd (formerly Indocel Holding Sdn Bhd), 13.3% by Etisalat and 20% by investing public.. Axiata Investment is a subsidiary of Telekom Malaysia (TM) Berhad Group, which in 2009 changed its name with Axiata.
XL Axiata is a subsidiary of the Axiata Group Berhad, which has 8 operators in Asia Aktel (Banglades), Hello (Cambodia), Idea (India), MTCE (Iran), Celcom (Malaysia), Multinet (Pakistan), M1 (Singapore), and Dialog (Sri Lanka).
AXIS Telekom Indonesia
The company was established with the name of Lippo Telecom as a subsidiary of Lippo in cooperation with Hutchison. It started operation in 2002 and it succeeded only in attracting a small number of subscribers. Later its name was changed with Pt. Natrindo Cellular phone (NTS) which acquired the licenses of 6 regional operators that it could operates as a national operator. In 1998 with a capital of US$ 60 million, NTS won a tender to become a GSM operator on the frequency of 1800 Mhz with regional license in East Java. The company, however, still failed to attract subscribers. In 2004, it had less than 100,000 subscribers, as a result Hutchison quit.
The number of NTS' subscribers even declined largely because of the small coverage. Now it has only around 10,000 subscribers and reported a loss of S$20 million in 2004. Toward the end of 2004. NTS teamed up with the Kodel group and secured the national operational license. NTS also grew to become a dial band operator after securing the TDD frequency TDD, allowing it to serve G3 cellular subscribers.
In 2006, NTS cooperated with Maxis ommunication, a leading telecommunications company from Malaysia, as a strategic partner which acquired 51% stake in NTS at a price of US$ 100 million. Maxis is committed to develop NTS to operate in a number of cities in Java starting July 2006.
In mid 2011, the name of the company was changed with PT AXIS Telekom Indonesia. Currently its shareholders include Saudi Telecom Company holding 80.1% stake, Maxis Communication Berhad from Malaysia as a 14.9% shareholder and PT. Harmersha Investindo a 5% owner.
In 2011, the government approved the first addition of 5 MHz frequency canals based on 3G technology for Axis. The same cost of Rp160 billion per year is also charged for the additional canals of 5 MHz uplink and downlink on the frequency of 1900 MHz earlier granted to three other 3G operators--PT. Telkomsel, PT. Indosat and PT. XL Axiata.
Axis would use the additional 3G canal to increase its capacity for mobile Internet service and data service access. Around 70% of the 4,000 units of base transceiver station (BTS) to be built until the end of 2011 are 3G based units to support Axis to achieve its data communication service target.
PT. Hutchison CP Telecommunications Indonesia (HCPT) was originally named PT. Cyber Access Communications which held the license as GSM cellular operator in 2004. Cyber Access was taken over by Hutchison Telecommunications International Ltd (HTIL) from Hong Kong as a 60% shareholder and Charoen Popkhand Group of Thailand a 40% owner. HTIL is a 3G service provider in Hong Kong and Israel having three different telecommunications brands Hutch, Kasapa and "3" in nine markets in Africa and Asia including Indonesia, and has more than 36.5 million 2G and 3G subscribers all over the world. Charoen Pokphand, a multinational company which has operated in Indonesia since 1971 providing 30,000 jobs.
HTIL and Charoen Phokphand spent US$1.4 billion on development of GSM 3 (Three) service in Indonesia. The name of the company was changed with PT. Hutchison CP Telecommunications Indonesia (HCPT). HCPT was the newest cellular operator in the country holding the license for 2G/1800 Mhz and 3G/WCDMA coming on line in March, 2007.
The name of Three is also used by Hutchison for its products in a number of countries in Asia and Europe including Hong Kong, Australia, Britain, Italy, Ireland, Austria, Sweden and Denmark.
HCPT is present in 67 cities in Java and Bali in June 2007 and August 2007. Its service covers Sumatra. Toward the end of 2008, "Three" was distributed by a national distributor in Kalimantan and Sulawesi and six regional distributors for the Jabodetabek area, Central Java, West Java, East Java and Bali. In 2010, HCPT expanded its network to Central Kalimantan as the 23rd province to be covered by the three services.
In expanding cellular network in Indonesia. HCPT cooperates with a number of vendors including Siemens, Nokia, and Converge Mbt. Siemens supplies the technology of Base Transceiver Station, Nokia develops Integrated Network and Converge Mbt facilitates the use of dealing system.
In 2011, HCPT was granted an allocation of additional 5 MHz of 3G-based frequency canals. This was the first addition of 3G-based frequency for the company. Meanwhile, two other operators already received such addition Telkomsel in 2009 and Indosat and XL Axiata in 2010.
CDMA-based cellular operators include PT. Smartfren Telecom (which was established through a merger between PT. Mobile-8 Telecom and PT. Smart Telecom) and PT. Sampoerna Telecommunications Indonesia.
PT. Smartfren Telecom was established through merger between PT. Smart Telecom of the Sinarmas Group and PT Mobile-8 Telecom early 2011.
PT. Mobile-8 was established in 2002 by the Bimantara Group. In 2005, it was taken over by Bhakti Investama Group of Harry Tanusoedibyo. In March 2007, Mobile-8 merged its three subsidiaries--PT Komunikasi Selular Indonesia (Komselindo), PT Metro Selular Nusantara (Metrosel) and PT Telekomindo Selular Raya (Telesera) into one with itself in a bid to improve efficiency.
The three subsidiaries were operators of AMPS-based cellular telecommunications service in different areas including Nanggroe Aceh Darussalam, Java, Bali, Sumatra, Sulawesi, Kalimantan and other eastern regions of Indonesia. After acquiring the three operators, Mobile-8 gradually changed the technology of their cellular networks from AMPS to CDMA digital, to allow them to expand coverage to include all Indonesian regions.
Mobile-8 was a CDMA 2001X and EV-DO based cellular operator. This system has he capacity to provide high quality voice and text services and high speed data access service as well as video streaming--based service. The products offered by Mobiel-8 were Fren card which came on line in 2003. Fren covers only Java and some areas outside Java.
PT. Smart Telecom (formerly PT Indoprima Microselindo) was a merger between PT. Primasel and PT. Wireless Indonesia in 2006. This company held the license for CDMA technology2000 1X EV-DO-based service. It started operation in June 2007 using the frequency of 1900 MHz which is designed for 3G telecommunications cellular service of GSM operators.
In line with the government regulation on the use of frequency of 1900 Mhz for 3G operators, Primasel was asked to move, but Primasel refused and decided to stay on the frequency as it insisted it would not overlapped with 3G frequency. If it turned out later to cause disturbance on 3G area, Primasel had to move away from the frequency of 1900 Mhz without compensation from the government.
Wireless Indonesia holds the license for data communications (not cellular) on the 3G frequency 3G since 2001. Currently WIN has to move from the frequency of 1900 to Time Division Duplex (TDD) in 1.9 Gigahertz. According to the Indonesian Telecommunications Regulator (BRTI) although Primasel is not on the 3G core band but in the satellite, it has to move because the downlink of Primasel still is overlapping with 3G. Primasel case is unique as its downlink frequency enters the 3G area while its uplink frequency the 3G does not. This means only half of the frequency block used by Primasel needs to be removed. Therefore, Primasel must pay half of the cost 3G operators have to pay. The up front fee and cost of rights to use frequency in the first day is Rp 704 billion.
PT Smart Telecom operates the 4th generation communication technology, Long Term Evolution (LTE), in Surabaya and Malang toward the end of 2010. This technology is given mainly for corporate subscribers requiring high speed internet access. LTE network helps data subscribers which want to use speed higher than EVDO Rev B 9.3 mbps developed earlier. Different from the Wimax technology, which will require construction of new infrastructure, the LTE technology could utilize existing network components.
After the merger, Smartfren completed the project of business support system (BSS) and value added service (VAS) as a solution to service migration. Smartfren named ZTE from China to combine the services and subscribers through the platforms of BSS and VAS. BSS Solution of ZTE includes OCS, CRM, prepayment service and integrated post payment service.
PT. Sampoerna Telecommunications Indonesia (STI) was established in 2005 by the Sampoerna Group which is owned by Putra Sampoerna, the second richest person in Indonesia according to the Forbes Magazine. Through Miel Investment Corporation, which is wholly owned by Putera Sampoerna and Trans Asia Telecom Ltd., the Sampoerna family is aggressive in expanding business to a number of other countries such as Sri Lanka in which it uses the brand of Lanka Bell. Miel Investment Corp. has a 72% stake up from 67% previously in Transmarco Ltd., a company with core business in telecommunications, retail and property. It is listed on the Singapore Stock Exchange.
Trans Asia Telecom Ltd. Is an ideal vehicle for Sampoerna to control telecommunications business in Southeast Asia. From the sales of its cigarette company PT HM Sampoerna Tbk., to Philip Morris, the family of Putra Sampoerna received US$2 billion in fresh fund. The family then started investing in various new business areas including cellular telecommunications through STI.
In early 2006 Sampoerna through its subsidiary Twinwood Venture Ltd acquired 58% of PT. Mandara Seluler Indonesia at a price of US$ 38 million. Mandara, which operates in Lampung, earlier took over PT. Mobisel, a mobile cellular operator with the technology of Nordic Mobile Telephone (NMT), which is already outdated.
After the take over by STI, in March 2006, the name of the product of Mandara earlier known as Neon was changed with Ceria. Up to now, STI has succeeded only in recording 50,000 subscribers in Lampung, Bali, and Lombok including 8,000 subscribers of Mandara.
The management has set target that in the next two years Ceria's coverage will be expanded nation wide. In short term, STI will expand operation to Aceh, Medan, Padang, West Java and Banten. STI targets to have 250,000 subscribers next year. STI's service started from Lampung in late February, 2007 with 16 BTS and then in Bali late March with 8 BTS.
STI which has the license to operate nationally with a low frequency already covers Kalimantan, Sulawesi, Maluku and Papua in 2007. In order to expand operations, STI launched card public phone for Lampung and East Java.
Singaporean and Malaysian investors dominate the market
The telecommunications business in Indonesia is dominated by foreign investors mainly by leading telecommunications companies from Singapore and Malaysia. He foreign investors acquired a number of local telecommunications companies such as Indosat, Telkomsel and XL.
Temasek Holdings from Singapore acquired a 35% stake in Telkomsel through Sing Tel and 41.08% stake in Indosat through Singapore Technology Telemedia (STT). STT paid Rp5.62 trillion for the stake. The stake in Indosat was later sold to Qatar Telecom to comply with the government regulation banning foreign investors to have stake in two or more telecommunications companies.
Sing Tel is a leading telecommunications company in Singapore currently having 124 million subscribers including 35 million subscribers of Telkomsel. Sing Tel also has stake in telecommunications companies in other countries such as Bharti in India, Optus in Australia, Advanced Info Service (AIS) in Thailand, Globe Telecom in the Philippines and Bangladesh Telecom Limited (PBTL) in Bangladesh.
Malaysian investor owns the majority shares of XL Axiata (formerly Excelcomindo) and Axis Telekom Indonesia (formerly Natrindo Cellular phone). Axiata Group Berhad (formerly Telekom Malaysia Bhd) owns 85% of XL Axiata. Currently the Axiata Group controls Dialog Telekom Limited Sri Lanka (87.7%), TM International Bangladesh/AKTEL (70%), and TM Internationally Cambodia (100%). In 2007 Axiata acquired 49% stake in Spice Communication Pyt Ltd, a cellular operator in India.
Maxis Communication, a Malaysian telecommunications company acquired 51% of Axis Telekom Indonesia at a price of US$ 100 million in 2006. Maxis Communication which is owned by Ananda Khrisnan, will provide a one-year loan of US$ 150 million to strengthen the capital of Axis. For the next five years, Maxis has even set aside US$ 1.25 billion for Axis.
All operators set aside relatively large capital expenditures totaling around US$3,540 million in 2011. Most of the capital spending is for infrastructure development. The rest for development of 3G data networks, service quality improvement and expansion of coverage. Such as to eastern part of the country--Kalimantan, Sulawesi and Papua. Penetration of cellular telecommunications in eastern Indonesia is lower than in other regions.
In 2011, Telkomsel plans to invest US$ 1.1 billion (around Rp 10.9 trillion), including 60% for improvement of broadband service covering capacity expansion and improvement of network quality, development of mobile broadband service and new business (mobile wallet, digital music, content, and mobile advertising).
Currently, all subscribers of Telkomsel are served by more than 38,000 units of BTS, including more than 8,300 Node B (BTS 3G). In order to improve service, Telkomsel launched more than 1 million service points for subscribers all over Indonesia, such as GraPARI, GeraiHALO, KiosHALO, dealer outlets, national retail, and m-Kios.
Indosat plans capital spending up to Rp 5.8 trillion--Rp 6.5 trillion (US$ 690 million) in 2011. Around 80% of the fund will be for cellular business expansion and 20% for optic fiber and satellite business units.
XL Axiata sets aside around US$ 500 million (around Rp 4.3 trillion) for capital spending in 2011. Around 30% of the fund will for the expansion of HSDPA and 3 G networks, expansion and networks and procurement of more units of BTS in eastern Indonesia and development of optic fiber networks. XL Axiata hopes to increase the number of its subscribers to 45 million in 2011. XL Axiata has expanded networks in Northern Regions, by building 500 new units of BTS until mid 2011, bringing the number of its BTS to 2,300 units. Earlier the number of its subscribers in the Northern regions totaled only 2.5 million and the number is expected to rise to 5 million subscribers.
In 2011, PT. Axis Telekom Indonesia, the operator of Axis, sets aside US$ 800 million for capital spending to build 4,000 new units of BTS all over Indonesia. The new units will bring the number of its BTS to 10,100 units. With the addition of the BTS, Axis hopes to attract new subscribers to bring the total number of its subscribers to 14 million by the end of this year.
Meanwhile, Smartfren Telecom has set aside US$ 450 million for capital expenditure and around 95% of which for the expansion of network infrastructure including BTS, billing system and information technology equipment. Around 80% of the fund was raised through bank loan and 20% in internal fund. Smartfren hopes to increase the number of its subscribers to 10 million in 2011 from 6 million in 2010. It also hopes to increase income to Rp1 trillion from Rp376 billion in 2010.
Number of subscribers
Number of subscribers up
In the five year period of 2006--2010, the number of cellular subscribers grew 31.9% per year on the average. In 2006, the number of cellular subscribers totaled only 63.8 million and in 2010 or four years alter the number shot up to 211. million Around 95% of the number of subscribers are pre-payment subscribers.
In 2008, the number of cellular subscribers grew fast by 50.5% to 140.6 million from 93.4 million. Two new national operators Axis and Three contributed to the surge in the number of subscribers. Expansion of networks by a number of operators all over Indonesia also contributed.
In 2009, the growth was slower rising only by 16.4% with subscribers totaling 163.7 million. In 2010, business was brisker with the number of subscribers growing 28.9% to 211.1 million. The slower growth indicates that the market is closer to the level of saturation.
Number of Subscribers by Operators
Telkomsel is by far the market leader with GSM cellular subscribers reaching 94 million in 2010 or an increase of 12.4 million from the previous year. Telkomsel is set to increase the number to 115 million subscribers in 2011. For that purpose the company will expand its network capacity and improve the quality of broadband services.
Indosat came second with subscribers totaling 44.2 million in 2010 or an increase of 11.1 million from 2009. Indosat is set to increase the number of its subscribers to 50 million in 2011.
Axiata is third with subscribers totaling 40.4 million in 2010 or an addition of 9 million subscribers from 2009. In 2011 it hopes to increase the number by 12% to 44.9 million subscribers.
Hutchison had 16.3 million subscriber sin 2010, followed by Axis 9.7 million subscribers. This year Axis is set to chalk up a 50% increase in the number of its subscribers to 16 million subscribers. Smartfren had 6.1 million subscribers in 2010. See the following table,
Technology and Infrastructure
a. Technology used
Cellular operators use different technologies depending on their vendors, which provide networks, equipment, etc.
Telkomsel's vendor is Siemens in developing 3G networks and Motorola to provide equipment. Ericsson has also been selected as the supplier of combined Circuit Core Network (for 2G and 3G) through the Mobile Soft switch technology.
In 2010, Telkomsel teamed up with ZTE Corporation for the trial run of Long Term Evolution (LTE) networks which is known as 4th generation cellular technology. LTE is a mobile broadband technology with a speed of a 20-40 Mbps on the average and a maximum of 150 Mbps. LTE is a new generation of 3G with the technology of HSPA Evolution with a maximum speed of 21 Mbps. LTE allows subscribers to have data/internet services with a maximum speed, either for e-mail, file upload, VOIP, video, mobile TV, multi-user gaming, or P2P data transfer. In addition, LTE could cover subscribers in wider areas at a radius of 5km.
ZTE provides the Software Defined Radio (SDR) technology which will improve the 2G/3G services to LTE without barrier and will save the cost of building networks. Telkomsel also named Huawei Device Indonesia as the provider of mobile broadband equipment or modem for internet connection, by launching modem of the Huawei E5830 and Huawei E153 types. As a market leader in cellular operation business Telkomsel is consistent in using the 3G technology, High Speed package Access (HSDPA), and HSPA+, and trial run of the LTE technology. Currently, HSDPA technology of Telkomsel has served 24 cities in Indonesia.
Indosat teams up with Alcatel-Lucent to develop cellular telecommunications networks outside Java. In 2007, Indosat focused more on expansion of its networks outside Java where the teledensity is low or less than 30%. Networks, provided by Alcatel-Lucent is in a package--infrastructure of evolium-based station subsystem, equipment of system to optimize networks of other supporting systems and micro wave based- network system to ensure that voice and data services is optimum Indosat also cooperates with Ericsson in the trial run of LTE networks.
XL Axiata also cooperates with PT Ericsson Indonesia, to prepare trial run of the LTE technology LTE. Ericsson provided the equipment and experts.
Axis named Ericsson to build, operate and manage its 2G and 3G networks in the Jabodetabek area. It uses the 3G technology and HSPA for expansion of high speed Internet in Java, Bali and Lombok. Axis teams up with Huawei, which manages the Radio Access, BTS up to Core Network Huawei also built, operates and supervise networks and regulates supply of spare parts.
Hutchison CP Telecommunications Indonesia cooperates with Siemen, Nokia, and Converge Mbt. Siemen supplies the BTS technology, Nokia develops Integrated Network, and Converge Mbt facilitates the use of dealing system. In addition, Hutchison cooperates with ZTE to provide BTS towers in Sulawesi and Kalimantan.
Smartfren Telecom (formerly Mobile-8) named Samsung Electronics to build networks and BTS starting in May 2007. Their targets of network expansion areas include Medan, Makassar, and Bali. Recently Smartfren and ZTE cooperated in the Business Support System (BSS) project and Value Added Service (VAS) for subscribers for service migration.
b. BTS Development and Ownership
Operators build more units of Base Transceiver Station (BTS) to support market penetration and expand coverage. BTS have been built almost all over the country reaching isolated areas. In 1995, there were only around 200 units of BTS in the country, but in 206, the number shot up to 32,663 units.
Development of BTS units continued despite difficulty in securing permit in some areas, and land clearing and shortage in power supply. Some district administration set limit to the number of BTS allowed in their areas. In Jakarta BTS units are not allowed to be built on ground but they have to be built on top of buildings. The city administration also requires joint ownership of BTS for efficiency.
In compliance with the policy of join utilization of BTS, XL cooperates with Indosat. Around 850 units of BTS of XL in East Java are included among the towers that could be used by Indosat under the agreement. According to the association of telecommunication tower developers (Aspimtel), BTS requirement reached 43,000 in 2007 including 2,000 to be used jointly.
With the growing demand for BTS and the high cost of up to Rp 1.5 billion for the construction of a BTS have prompted business in BTS lease. The business is now booming with rents ranging from Rp 10 million to Rp 15 million/unit/month. Currently there are around 30 companies operating in renting BTS.
In 2010, Telkomsel succeeded in launching 37,000 units of BTS all over Indonesia. In 2011, Telkomsel plans to build 1,000 more units of BTS.
Previously XL Axiata had smaller number of BTS compared to those of Indosat, but in 2010 XL Axiata had larger number of BTS totaling 22,191 BTS. In 2011, XL Axiata plans to build 1,500--2,000 new units.
Currently Indosat has 17,732 units of BTS all over the country. In a bid to attract more subscribers, Indosat has concentrated more on expanding networks outside Java allowed it to be left behind by XL Axiata in the number of BTS.
In 2010 Axis had 10,000 units of BTS all over Indonesia. Around 75% of the units were 2G BTS 2G and the rest 3G BTS.. Axis has expanded operation not only in the Jabodetabek area but also in Kalimantan and Sulawesi. Axis plans to build 4,000 new units if BTS this year in Java and Sumatra.
With 37,000 units of BTS, Telkomsel leads over other operators, followed by XL Axiata with 22,191 units and Indosat with 18,1082 units The three largest operators account for 57.3% of the total number of BTS in the country with other operators including Axis, Hutchison, Smartfren and Sampoerna Telecommunications accounting for the rest.
A BTS of Telkomsel serves around 2,540 subscribers, as against Indosat's BTS serving 2,702 subscribers.
Income of cellular telecommunications companies
a. Telkomsel earns largest Income
The income of cellular telecommunications companies in the country in 2010 totaled Rp 83.7 trillion, up from Rp 77.9 trillion in the previous year.
Telkomsel reported the largest income of Rp 40 trillion in 2009, up to Rp 45.2 trillion in 2010. In the first quarter of 2011, Telkomsel posted income at Rp 11.297 trillion, including from broadband service contributing Rp 1.634 trillion. The number of subscribers to its broadband service is 23 million, including 4.3 million subscribers to Telkomsel Flash, 16.8 million retail subscribers and 1.58 million BlackBerry subscribers.
XL Axiata reported Rp 13.8 trillion in income in 2009, up to Rp 17.6 trillion in 2010. The largest income was from voice service accounting for 50%, followed by income from SMS service accounting for 20%, and data service 10%. In the third quarter of 2010, the duration of usage of XL voice service totaled 59.1 billion minutes, with 125 billion SMS transmissions.
Indosat's income from cellular service alone totaled Rp 16 trillion in 2010, up from Rp 14.3 trillion in 200. Hutchison posted an income of Rp 615 billion in 2009. PT. Smart Telecom's income totaled Rp 546 billion and PT Mobile-8 Rp369 billion in 2009. After the merger the two companies with the name of PT. Smartfren Telecom, had a total income of Rp 214 billion in the first quarter of 2011.
b. Average Revenue Per User (ARPU)
Average Revenue per User (ARPU) is an indicator of productivity of subscriber channel. Generally, income per subscriber is based on monthly average. Amid sharp competition, operators offer generous facilities and incentives to attract subscribers resulting in a decline in ARPU in the past several years.
ARPU also declined as handset users tend to use SMS for communications. SMS account for 20%-40% of operators' income with daily traffic of 100 million transmissions. The transmissions could surge five times larger during religious celebrations like Idul Fitri. The high intensity of SMS transmissions expands the market of cellular service but income per subscriber decline.
In 2010, some of the cellular operators reported significant decline in ARPU, but the number of subscribers increased.
Telkomsel reported a 16.5% fall in pre-payment ARPU to Rp 35,803 from Rp 43,000 per month. Its post payment ARPU with its Hallo card fell 17.2% from Rp 214,000 to Rp177,288 per month and combination of post and pre payment ARPU dropped 18.4% to Rp 39,168 from Rp 48,000 per month.
Indosat suffered a decline in pre-payment ARPU by 5.8% but post payment ARPU rose 33.5%. Combination of ARPU dropped 7.8%.
XL Axiata also posted a decline in pre-payment ARPU and combination of ARPU by 5.9% and 5.6% respectively. Post payment ARPU rose 14.9%.
Axis, however, reported an increase both in prepayment and post payment ARPU by 33.5% and 100% respectively with combination of ARPU up by 34.5%.
With the growing GSM and CDMA cellular technology, operators of mobile telephone could offer growing varieties of features. High speed data transfer of 3 megabyte (MB) per second allows subscribers to enjoy new features such as video calls, monotone video clip, film, TV broadcast through cell phone, internet access with high speed or video conference. Video calls allow face to face communications through cell phone screen, video streaming which allows handset holders to select TV program, big data transfer and faster internet access.
Mobile TV is a content provided by operators of 3G service in Indonesia. This service was first launched in the second half of 2006. Fren of PT. Mobile-8 offered service of Mobile Internet Data Access. The subscribers of Fren could enjoy fast data transfer. Fren also has service of Video on Demand such as Traffic Monitoring, Music Video Clip and Spiritual Advice through Video Streaming.
Currently, operators focus on the market of data of wireless broadband which has high speed that it is called high speed downlink packet access (HSDPA). In the past four years, the service of wireless broadband grew fast with the strong demand from the cellular users for mobile internet service and mobile banking service.
Competition in the market of cellular service is sharp as the market is almost saturated with subscribers already exceeding 200 million. In large cities like Jakarta, Surabaya and Medan, the market penetration has reached 150% of the potential. Observers said the market is saturated when the number of subscribers has reached 77.5%-80% of the population. Competition is especially sharp between major operators--Telkomsel, Indosat and XL Axiata, which together dominate 84.5% of the market in Indonesia.
Competition is mainly in tariffs, coverage and services. Tariffs are important factor in the segment of middle to low income subscribers. Coverage is also a factor to be considered by low and middle income subscribers. Consumers also favor operators having point of charge (POC) zone.
All operators have offered various services like free roaming to attract subscribers.
Market analysts said churn rate reached 15% in 2010 or there were 31 million cards out of use among around 211 million cellular subscribers. The high churn rate was attributable to low prices of pulse of the starter pack compared to the cost of pulse refill. Analysts said Kartu as of Telkomsel and the starter pack of Smart iM3 of Indosat are chosen by most consumers because of heir low prices. In 2011 churn rate is estimated to decline to 10%-12%, competition in tariff was less sharp with consumers begun to show loyalty to a certain brand or operators.
Income of cellular telecommunications operators
In the past four years, the income of cellular phone operators in the country has continued to increase with the fast growing number of subscribers in 2007, the income of cellular operators totaled Rp 61.4 trillion with 93.4 million subscribers. The income rose 14.8% to Rp 70.5 trillion with 140.6 million subscribers in 2008. The income grew further by 9.9% to Rp77.5 trillion with 163.7 million subscribers in 2009 and to Rp83.7 trillion with 211.1 million subscribers in 2010. The increase in the total income followed the growing number of major operators mainly from basic services like short message service (SMS) and broadband internet access which grew fast.
Each operator has different marketing strategy to attract subscribers.
Telkomsel adopt hard cluster system of marketing in 2011 under which subscribers both Simpati and AS users have to refill pulse from the MKios chip. A certain cell phone could be refilled in the same cluster. For example, a user from Cluster A who happen to be in Cluster B areas, may not refill pulse in that area
--Obral obrol Mentari (Talkative Mentari)
Indosat offers daily registration package which is very cheap for on net conversations based on selected time or with users of registered.
Indosat provides free service package for telephone and SMS for certain numbers after sending SMS and using telephone with certain pulse.
--Set special numbers
Indosat offer special service for subscribers post paid Matrix under which subscribers could set the Matrix card number through SMS and web portal.
--Paket unlimited (Unlimited Package)
XL Axiata provides service for subscribers to select low tariff free package for telephone and SMS and internet without limit.
--Paket Akrab (Intimacy Package)
This system of promotion is used by XL Axiata for subscribers often make free telephone calls to friends or relatives.
--Hadiah berlimpah isi ulang (Refill with abundant prizes)
Axis offers Top Up marketing strategy by increasing the value of Top Up subscribers. Through this program of Hadiah Melimpah, refilling is offered to subscribers through lot. Each subscribers refilling at least at a price of Rp150,000 per period is entitled to point to be drawn with car prize.
Almost all operators offer starter pack in bundling and handset with low price in a bid to boost sales.
PT. Telkomsel hopes to sell 12 million units of cellular phones through bundling marketing program in 2011, up from 9 million in 2010 including 7 million units of cell phone and 2 million modems and notebook/laptop. In 2011, Telkomsel launches a bundling program of Telkomsel-Smart-Phone IVIO Android DE-38 with Simpati pre-paid card at a price of Rp1.49 million per unit.Sales with the program grew triggered by the phenomenin of unification of gadgets such as cell phone, modem, notebook and SIM card and internet. Telkomsel has established cooperation with 32 principals including Chinese principals, BlackBerry, Nokia, SonyEricsson, Samsung, and HT. Until end of 2010, Telkomsel has teamed up with at least 75 types of cell phone with low prices to smartphone.
Meanwhile, XL Axiata Tbk cooperates with Apple Inc. to offer the program of bundling package of iPhone 4 starting 22 April 2011 with various options of packages. With the bundling program of iPhone 4 ini, XL offers a price of Rp 999,000 with unlimited internet bonus and, telephone, SMS and MMS.
--Standardization of cellular service quality
The standard for subscriber rate of complaints about accuracy is not more than 5% every month. Complaint must be taken care of in 30 working days.
The successful telephone calls must reach at least 90% of all call made. The standard for the duration of SMS to reach the destination is not more than 30 minutes with a successful rate of 95%. Reports about hindrances in telecommunications service by subscribers may not more than 50 in a year for every 1,000 subscribers.
The Indonesian Telecommunications Regulator (BRTI) could audit the service provided by operators any time to ensure hat the standard is complied with.
--Regulation on fine and sanctions
Telecommunications operators failing to respond to complaints from subscribers will face a fine of up to Rp 1 million for every complaint.
--Cost of Rights to Use Frequency (BHP)
Base don the government regulation (PP) No. 28/2005, So far BHP is set based on the width of tape and transmitting capacity. In the future, BHP will be set based on bandwidth that operators will be free to use the frequency resource both for cellular or FWA with the same BHP. The government will reduce BHP for GSM and raise it for CDMA, to cut the tariff difference in order to create a fairer competition.
--Communication traffic clearing
The government has issued a regulation No 14/PER/M.KOMINFO/2009 on clearing of communication traffic that includes process of settlement of interconnection traffic including settlement of data discrepancy and presenting interconnection traffic data. Communications traffic clearing is made by the provider of telecommunications network together.
--Use of Joint Towers
A joint decision of the home affairs minister, public works minister, minister for information and communications and head of the investment coordinating board No 18/2009 sets guidelines of development and the use of telecommunications towers jointly by a number of telecommunication operators. However, implementation of the joint decision was postponed until December 31 in 2012 as the implementation is hampered by the regulation on location of towers by regional administrations. Regional administrations required building permit for antennae 6 meter high above buildings.
New units of BTS built after the joint decision, however, must be designed for use jointly among a number of operators.
XL Axiata plans to sell 7,000 units of BTS, but later decided to use it it as no much interest shown in the offer. IT then offers to rent out the towers. The company has succeeded in renting out 5,000 units of the towers to other operators.
Indosat also rents out towers to other operators such as Axis and Hutchison. Hutchsion rents the towers of Indosat for 12 years.
Meanwhile, there are companies leasing out towers such as PT Tower Bersama Infrastructure Tbk and PT Solusi Tunas Pratama. Currently PT. Solusi Tunas is expanding its business of leasing out towers and plans to buy up to 300 new units from the operators of mobile phones.
A presidential regulation No 36/ in 2010 bans foreign investment in certain areas. The maximum limit of foreign ownership in telecommunications companies is from 49% to 65%.
Currently almost all cellular telecommunications companies in the country are controlled by foreign investors. Telkomsel is 35% owned by Sing Tel. of Singapore. Indosat is 65% owned by Qatar Telecom from Qatar, XL Axiata is 59.63% owned by Axiata Group Berhad of Malaysia.
Business risks and bottlenecks
Big and financially powerful operators having established strong market foothold are more efficient, therefore, could offer cheaper service. Competition is sharp not only in price but also in service quality and coverage.
--Limited availability of spectrum
There are already many operators but spectrum is not sufficiently available. The condition hampers efforts to increase the number of subscribers that could result in a decline in service quality.
--Change in government policy
Cellular industry is regulated tightly with government regulations Change in the regulation could have impact on the operators. Some regions issued their own regulations on telecommunication towers.
Conclusion and prospects
The number of cellular users in the five year period of 2006-2010 grew 31.9% annually on the average--from 63.8 million to 211.1 million. Currently the country has a population of around 237.5 million, and cellular subscribers have reached 211.1 million that the market is almost saturated.
Sharp competition benefits consumers as they have more choices among the services. A person could have more than one telephone number causing an increase in the churn rate to 12%. Therefore, operators need to maintain loyalty of their subscribers.
The high churn rate and the fact that many subscribers have more than one telephone numbers open the market wider. In many other countries the number of telephone numbers exceeds the number of population.
In the past three years, competition has shifted from tariff rate to data service or internet tariff. The price of data base service such as internet and various applications is declining to attract subscribers. Data base has become a new growth driver almost as potential as the traditional source of income, voice service. Three largest players Telkomsel, Indosat and XL Axiata compete sharply in offering data service promotion or internet access with cheaper prices.
Telkomsel is currently the market leader with a 44.5% share of the market in number of cellular subscribers and with coverage of all over the country. Telkomsel, therefore, focuses more on improving the quality of its services to keep the subscribers loyal.
Other competitors are still struggling to grab larger share of the market while maintaining the loyalty of their subscribers. In early this year, two operators with CDMA and FWA licenses--Smart Telecom and Mobile-8 were merged into Smartfren Telecom in a bid to improve efficiency.
The number of subscribers in the past five years (2006-2010) grew strongly by 31.9% per year, but the growth is expected to be slowed in the coming years from an estimated 241 million in 2011 to 324 million in 2015.
Table--1 Cellular operators, system, frequency and products Operator Cellular System Frequency Coverage GSM PT Telkomsel GSM 900 Mhz Nationally Cellular and 1800 PT Indosat GSM 900 Mhz Nationally Cellular and 1800 Mhz PT. XL Axiata GSM 900 Mhz, Nationally Cellular 1800 Mhz and TDD PT AXIS Telekom GSM 1800 Mhz Locally Indonesia * Cellular/ and TDD Nationally DCS-1800 PT. Hutchison GSM 1900 Mhz Nationally Charoen Cellular Pokphand Telecommunicatio ns Indonesia CDMA PT Smartfren CDMA 1900 Mhz Nationally Telecom 2000 1x/ EVDO PT. Sampoerna Telecommunicatio CDMA 450 Mhz Locally ns Indonesia Operator Cellular Products No: Payment GSM system PT Telkomsel Halo 811 Post payment Simpati 812 Pre-payment Kartu As 852 Pre-payment PT Indosat Matrix 815 Post payment Mentari 815 Pre-payment and 0858 IM3 856 Pre-payment post payment PT. XL Axiata XL Bebas 817 Pre-payment Post payment Jempol Xplor 0818 and 859 Business Solution PT AXIS Telekom Locally Pre-payment Indonesia * Nationally /post payment PT. Hutchison 3 (Three) 899 Pre-payment Charoen and post Pokphand payment Telecommunicatio ns Indonesia CDMA PT Smartfren Fren 888 Pre-payment Telecom PT. Sampoerna Telecommunicatio Ceria Pre-payment ns Indonesia Neon Sources: ATSI Note : * formerly named PT. Natrindo Telepon Seluler Table--2 Cellular phone operators and owners Shares Operators Local partners (%) Foreign partners PT Telkomsel PT Telkom 65 Singapore Telecommunication Ltd. (Sing Tel) PT Indosat Tbk The government 15 Qatar Telecom Indonesia Publik PT XL Axiata PT Telekomindo 40,37 --Axiata Group Berhad Primabhakti Malaysia Publik PT. AXIS Telekom PT. Harmersha 5 Maxis Communication Indonesia * Investindo Bhd (Malaysia) PT. Hutchison CP -- -- Hutchison Telekomunikai Telecommunications Indonesia International Ltd Charoen Popkhand Indonesia Shares Operators (%) PT Telkomsel 35 PT Indosat Tbk 65 PT XL Axiata 59,63 PT. AXIS Telekom 95 Indonesia * PT. Hutchison CP 60 Telekomunikai Indonesia 40 Sources: Data Consult Note : * formerly named PT Natrindo Cellular phone Table--3 Capital expenditures of cellular operators, 2011 Operator Capital spending (US$ million) Telkomsel 1.100 Indosat 690 XL Axiata 500 Smartfren Telecom 450 Axis Telekom Indonesia 800 Hutchison CP Telecommunications Indonesia N.a Sampoerna Telecommunications Indonesia N.a Total 3.540 Sources: ICN processed Table--4 Number of cellular subscribers, 2006-2010 Year Number Growth (million (%) subscribers) 2006 63.8 -- 2007 93.4 31,7 2008 140.6 50,5 2009 163.7 16,4 2010 211.1 28,9 Average growth 31.9 Sources: Post and telecommunications directorate general Table--5 Cellular operators and market, 2010 (million subscribers) Operator Products NetworksGSM PT Telkomsel Halo, Simpati, Kartu As PT Indosat Matrix, Mentari, IM3 PT XL Axiata XL Jempol, XL Bebas, Xplor PT. Hutchison Three Charoen Pokphand Telecommunication PT. AXIS Telekom Indonesia Axis (formerly PT. Natrindo Telepon Seluler) Sub Total Subscribers GSM NetworksCDMA PT. Smartfren Telecom Smart Fren Hepi PT. Sampoerna Ceria Telecommunications Indonesia Sub Total Subscribers CDMA Total (million subscribers) Operator Number of Share subscribers (%) NetworksGSM PT Telkomsel 94.0 44.5 PT Indosat 44.2 20.9 PT XL Axiata 40.4 19.1 PT. Hutchison 16.3 7.7 Charoen Pokphand Telecommunication PT. AXIS Telekom Indonesia 9.7 4.6 (formerly PT. Natrindo Telepon Seluler) Sub Total Subscribers GSM -- -- NetworksCDMA PT. Smartfren Telecom 6.1 3.0 PT. Sampoerna 0.348 0.2 Telecommunications Indonesia Sub Total Subscribers CDMA -- -- Total 211.1 100.0 Sources: Post and telecommunication directorate general Table--6 Operators and technologies used Technology Operators Network providers Equipment providers Telkomsel Siemens for 3G networks Motorola ZTE for LTE networks Huawei Indosat Alcatel--Lucent Alcatel-- Lucent Ericsson for LTE networks XL Axiata Huawei Ericsson for LTE networks Axis Telekom Ericsson for Jakarta Indonesia Huawei for West Java and East Java. Hutchison CP Siemens for BTS Nokia Telecommunications Indonesia Nokia for integrated network Converge Mbt to facilitate dealing system ZTE Smart Telecom ZTE for networks ZTE Samsung Electronics Nokia Nexian LG Sampoerna Qualcom International Huawei Telecommunications Technology Indonesia Investment Huawei China Operators Countries of origin Telkomsel USA China China Indosat Sweden XL Axiata China Sweden Axis Telekom Sweden Indonesia China Hutchison CP Finland Telecommunications Indonesia Finland China Smart Telecom China Finland China South Korea Sampoerna China Telecommunications Indonesia Huawei China Sources: ATSI Table--7 Operators and BTS units, 2010 Number of BTS Operators (unit) % Telkomsel 37.000 37.0 XL Axiata 22.191 22.2 Indosat 18.108 18.1 Axis Telekom Indonesia 10.000 10.0 Smartfren Telecom 1.500 1.5 Other (Hutchison and STI) 11.201 11.2 Total 100.000 100.0 Sources: ICN processed Table--8 Operating income of cellular operators, 2009 and 2010 (Rp billion) Operators 2009 2010 Telkomsel 40.000 45.200 XL Axiata 13.880 17.637 Indosat 14.300 16.027 Hutchison CPT 615 N.a Mobile-8 369 N.a Smart Telecom 546 N.a Sources: Post and telecommunication directorate general Table--9 Cellular operators and ARPU, 2009-2010 (Rp per month) Operators 2009 2010 Growth % Telkomsel Pre-payment 43.000 35.803 -16,7 Post payment 214.000 177.288 -17,2 Combination 48.000 39.168 -18,4 Indosat Pre-payment 33.438 31.493 -5,8 Post payment 175.327 234.037 33,5 Combination 37.664 34.712 -7,8 XL Axiata Pre-payment 34.000 32.000 -5,9 Post payment 167.000 192.000 14,9 Combination 36.000 34.000 -5,6 Axis Telecom Indonesia Pre-payment 6.300 8.413 33,5 Post payment 0 257.982 100,0 Combination 6.300 8.473 34,5 Hutchison CPT Pre-payment 11.000 135.000 1.127,3 Post payment 194.000 9.000 -95,4 Combination 11.000 10.000 -9,1 Mobile-8 Pre-payment 11.310 10.000 -11,6 Post payment 48.918 45.000 -8,0 Combination 12.986 12.000 -7,6 Smart Telecom Pre-payment 25.000 51.000 104.0 Post payment 52.000 13.000 -75,0 Combination 26.000 14.000 -46,2 Sampoerna Telecommunications Indonesia Pre-payment 22.221 12.683 -42,9 Post payment 128.541 249.473 94,1 Combination 22.252 16.894 -24,1 Sources: Annual report of operator/ICN processed Table--10 Total income of cellular operators in Indonesia, 2007-2010 Year Total income Growth (Rp trillion) 2007 61.4 -- 2008 70.5 14.8 2009 77.5 9.9 2010 83.7 8.9 Average growth 11.2 Source: ICN, processed Table--12 Estimate of the number of cellular subscribers, 2011 - 2015 Year Number of subscribers (million persons) 2011 241 2012 257 2013 269 2014 295 2015 324 Source : ICN, processed
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|Title Annotation:||INDUSTRY PROFILE|
|Publication:||Indonesian Commercial Newsletter|
|Date:||Mar 1, 2011|
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