Telecom Lead Asia: After China and India, Indonesia has become the hot destination for mobile equipment vendors such as Ericsson, IBM, Nokia, Huawei, BlackBerry, Nokia Siemens, etc.
That’s why Ericsson CEO Hans Vestberg said recently that Indonesia is one of its top 10 revenue contributors and a strategically important market for the largest telecom equipment vendor.
Indonesia is a significant market for phone major Nokia and mobile broadband solutions provider Nokia Siemens Networks. Indonesia is in 9th largest revenue contributing country. For comparison, India, where the phone major is facing a Rs 2,000 IT showcause notice due to the alleged wrong accounting practice, generates maximum revenue for Nokia and Nokia Siemens.
BMI, in its recent market report, says Indonesia’s telecom market presents growth opportunities due to its large and youthful population and low broadband penetration rate.
Though incumbent telecom operator Telkom Indonesia dominates the fixed-line market and has a strong presence in the mobile sector, fixed-wireless services are becoming more prevalent as operators roll out services to metropolitan and underserved areas.
BMI forecasts that Indonesian mobile penetration will touch 173.5 percent, with nearly 444.8 million mobile subscribers and 55 million fixed-line with 21.6 percent penetration at the end of 2017.
But it will be half of India’s current mobile subscriber base at around 850 million.
The healthy competition in the mobile/fixed-wireless market brings cheap services to consumers, but declining ARPU and usage levels for operators.
IBM in Indonesia
Apart from Nokia Siemens and Ericsson, IBM is gaining presence in Indonesia. IBM has signed a data center deal with Telkom Indonesia. This collaboration is expected to address the needs of enterprises across industries in Indonesia for data center solutions, supported by reliable communication networks.
Telkom also worked with IBM to address critical location challenges, such as Indonesia’s frequent earthquakes and tropical storms that can potentially bring down key communications networks. The data center, designed to endure natural disasters, is backed-up by power generators and systems that support the main power and electricity to ensure uninterrupted operations.
Arief Yahya, president director, Telkom, said: “We chose IBM as our strategic partner due to its proven capability of designing, building, and operating the most advanced data centers. IBM’s comprehensive suite of data center offerings will help companies in the region improve efficiency, scale up easily, and harness new opportunities.”
Suryo Suwignjo, president director, IBM Indonesia, said: “With IBM’s extensive capabilities in data centre capacity, combined with Telkom’s experience and understanding of local business needs, we will be able to provide our clients with a superior experience.”
Ericsson aims to scale up its business in Indonesia through the provision of machine-to-machine solutions to their large portfolio of mobile operator clients.
Ericsson’s clients include top three operators PT Telekomunikasi Selular, PT Indosat and PT XL Axiata. These operators are ramping up their 3G networks to address swelling data traffic.
IDC estimates that total telecom spending in Indonesia will reach $17 billion by 2013
Opportunities in Indonesia
Telkom Indonesia had 171 million subscribers in 2012, up 32 percent from 129.8 million at end-December 2011.
Of these, some 125.1 million are mobile customers, up 17 percent year-on-year.
Broadband users increased by 82.8 percent last year, including 2.3 million fixed broadband and eleven million wireless broadband connections.
5.8 million people were BlackBerry users, while .9 million had a fixed landline and 17.9 million were fixed-wireless (TelkomFlexi) users.
Picture source: media2.onsugar.com