Mobile Data in Indonesia

With the introduction of 4G LTE network on December, 2014, Indonesia has once again showed its growth in the field of telecommunication. Mobile data revenue has increased by 30% from 2013 and now contributes almost 50% of total usage revenue for each of the three leading operators - XL Axiata, Telkomsel and Indosat.

A staggering 150 million users are subscribed to mobile data as there is an increasing adaptation to tablets and mobile phones. However note that the majority of Indonesians are still using feature phones, which offer only partial browsing and streaming capabilities. Further, smartphones are not forecast to become more than 50% of the overall device base until 2017.

According to researches, Jakarta has the highest number of subscribers, given that the metropolitan is home to highly advanced citizens as it is the center of business. In ranking, Telkomsel remained to have the highest share of the market with 60% of the population using it. On the other hand, XL Axiata’s market is affected by its recent selling of towers to PT Solusi Tunas to pay some debts as well as its acquisition of Axis Capital Group, one of the emerging operators in the industry as well. It came out second with a share of 34%. Indosat came 3rd with 19% market share.

Many believe that Indonesia should have reached the internet age. In reviews, prediction of the archipelago being mainstreamed in using the web has been materialized. Web users’ base breaks the 100 million mark for the first time in 2014 and the world’s most populous country becomes part of the global consumer Internet community.

What is clear is that cellular industry in Indonesia is approaching the ‘end of the beginning’ in its transition from a voice-centric to a data-centric market.

Data revenues are becoming ever more critical for the operators as they seek to compensate for stagnant returns from legacy voice and SMS services.

With LTE/4G services becoming widely available within the next year, there is massive pent-up demand for mobile data services still to be unlocked across the entire market from consumers and enterprise users alike.

The experience of the more advanced markets in the region indicates that we can anticipate a lively battle between the mobile operators in Indonesia for these new revenue streams.

Despite the development of this field, analysts also set out warnings stating that anytime soon, Wireless Fidelity (Wi-Fi) will be dominating the mobile data in the future because of its availability in public places for free.