Mobile Markets Reach Saturation in Indonesia, Operators Encouraged to Look Elsewhere

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Reports from six telecommunication operators in Indonesia show that there were a total of 333.6 million mobile numbers in active use in the January to March period, up just 1% from the end of last year.

The data indicates that mobile markets have reached saturation in Indonesia, with almost all of the country’s 150 million adults currently utilizing two or more mobile numbers daily, said Kristiono, chairman of non-profit telecommunications lobby group, the Indonesia Telecommunication Society. Indonesia had a population of more than 250 million in 2010, according to the latest census.

“The remaining part of the population who have yet to obtain mobile numbers, comprise of children or those who still cannot afford a mobile phone,” Kristiono said. “The children still need to reach certain productive age to become mobile subscribers, while the poor still need to increase their purchasing power.”

This creates an imperative for mobile operators to look for growth elsewhere in the near term.

Read more on Telcos landscape and roadmap in Indonesia

Kristiono said mobile operators need to encourage existing customers, who tend to use more data over mobile networks to consume media on the Internet or to stay connected with friends and families through mobile chat applications such as WhatsApp, to migrate to faster data services. Alternatively, operators could offer more mobile content and apps to generate more value other than from subscriptions, he said.

A quick overview of the major players in the telco industry in Indonesia:

  • Telekomunikasi Seluler, a unit of the country’s largest telecom Telekomunikasi Indonesia, had 153.6 million subscribers by the end of March.
  • That is more than double the number reported by Indosat Ooredoo, which is controlled by the Qatari-based telecom. It had 69.8 million subscribers.
  • Hutchison 3 Indonesia, the operator of Tri, came in at third place with 55.5 million subscribers.
  • XL-Axiata, which is owned by Malaysian telecom giant Axiata, followed with 42.5 million subscribers.
  • The Sinar Mas Group’s Smartfren Telecom has seen its subscriber numbers stagnate at 10.5 million over the three-month period
  • Lippo Group’s Internux, the operator of Bolt! 4G LTE, saw a 13% jump to 1.7 million customers.

A version of this appeared in Jakarta Globe on July 26. Find the full version here