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Indonesia - Telecoms, Mobile, Broadband and Forecasts

LONDON, Nov. 14, 2017 /PRNewswire/ -- Consolidation continues in Indonesia's telecom market as customers embrace mobile broadband

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After a period of uncertainty, the Indonesian telecom sector has settled into what looks like a healthy development phase. This country of around 250 million people presents a huge potential market; however, it must overcome some particularly big challenges if it is to successfully continue the building of the telecommunications infrastructure required to support a large population spread over what is a uniquely complex geography. Two of the more significant challenges are the crowded operator market, especially the mobile segment, and the slow rate of implementing regulatory decisions. At the same time, on a broader front, there is no avoiding the fact that Indonesia must also continue to deal with a range of social, political and economic issues that have proved problematic over the years.

The embracing of fixed-wireless technology, after an early stumbling start to building the country's fixed-line network, provided a fresh basis for expansion. Wireless became the dominant component within the fixed market segment; by 2012 wireless services made up 75% of the total fixed-line subscriber base. Then in 2013 the fixed-line market segment suffered a major setback with a huge decline in the wireless subscriptions. In a short space of five years the wireless technology platform had transformed the fixed-line market in a positive fashion and then suffered a major setback.

Meanwhile, a strong mobile market (penetration of 122% in early 2014) was seeing a moderation in its growth rate. While the global financial crisis saw expansion in mobile subscriber numbers slow somewhat back in 2009, the market did not lose much momentum overall. In the four years to December 2013 the mobile subscriber base grew from 150 million to 300 million. As penetration passed the important 100% milestone, there was still considerable potential for further growth in the market. Consumer interest has started to shift to the 3G services being offered by the operators and take up of mobile data services is certainly on the rise, as evidenced by a significant surge in the sale of smartphones. At the same time it is noted that Indonesia is only moving slowly towards the introduction of 4G/LTE technology with both the government and the operators not appearing keen about it just yet.

Estimates for the number of internet users in Indonesia at the end of 2013 vary from 40 million to 55 million; in any case this represents a rapidly growing internet population. At the same time, the fixed internet subscription market was generally depressed with just three million subscribers reported by end-2013. Broadband subscriptions are certainly growing but from a low base. The expansion of mobile broadband in particular was compensating for the sluggish fixed broadband market and offering real promise for increased online activity as the uptake of new generation mobile services accelerates.

Data in this report is the latest available at the time of preparation and may not be for the current year

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