Wednesday, September 5, 2012

Users 10 to 19 Drive Telekomunikasi Indonesia Growth

PT Telekomunikasi Indonesia operates in a market where there are 250 million mobile subscribers out of a population of  240 million, and its fortunes illustrate the gradual shift to wireless modes of communications among users of virtually all ages, with significant growth form users 10 to 19 years old.

PT Telekomunikasi Indonesia operates fixed wireline, fixed wireless and mobile networks, serving about 130 million subscribers for the year ended 2011.

At the end of 2011, the company earned about 16 percent of revenue  from its fixed wireline business, but total wireline revenues dropped by almost seven percent, largely due to increased smart phone use and a rising mobile penetration in Indonesia.

That is not too surprising, as most fixed network operators face increased product substitution from mobile alternatives.

The company's fixed wireless revenues also declined significantly in the financial year ended 2011. An intense competitive environment in the region, as well as deterioration in voice revenues, led to the 31 percent decrease in fixed wireless revenues. The company is facing
competition from local telecom companies, with every company introducing new and cheap packages for its respective text messaging and voice call services.

The company's mobile business also experienced a slight deterioration in 2011 as well, despite the increase in its mobile subscription base, at least partly because prepaid revenue contribution is less predictable than provided by postpaid accounts.

Total subscribers grew by almost 14 percent in the year as compared to 2010.

Mobile data was largely responsible for offsetting the drop in revenues from other segments, growing by almost 21 percent in the financial year ended 2011.

Overall, mobile customer base grew almost 15 percent in 2011, reaching 117 million subscribers with total additions of 10 million, according to Seeking Alpha.

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