93% of Indonesian Inrternet Users Get Online Using Smartphones

Fully 93 percent of Indonesia’s 88 million internet users access the internet from smartphones, according to researchers at GfK.

A GfK survey found that besides smartphones, 11 percent  of Indonesia’s users go online with desktops and five percent  use tablets.

“Our study reveals that Indonesia has a very active online population who spend an average of 5.5 hours a day accessing an average of 46 apps and web domains with their mobile device each day,” said Guntur Sanjoyo, managing director of GfK in Indonesia.

Indonesians spend an average of 32 hours per month each using apps. That’s compared to 27 hours by Brazilians, 20 by Germans and 17 by the Dutch.

Of the 32 hours that Indonesians spend using apps, 19 are spent using communication and messaging apps. This is roughly the same amount of time that German and Dutch people spend each month using all of their apps.

In other words, Indonesian smartphone users spend about 60 percent of their app time on messaging,

Three apps – all messaging apps – used by Indonesians are BBM, WhatsApp and the Korean/Japanese Service Line.

The top three app categories in terms of time spent using them for all countries are messaging, social and then gaming.

Apps that offer ways to overcome traffic jams, a huge problem for commuters in the Indonesian capital of Jakarta, are also very popular in the region.

Motorcycle taxi app GO-JEK is among the top 15 of apps in terms of time spent. And GO-JEK was only launched in January 2015. Shopping, financial and banking apps are rather less used.

source: GfK  

Vodafone M-Pesa Mobile Money Has 25 Million Active Users

Vodafone’s M-Pesa mobile money business has exceeded 25 million active users across Africa, Asia and Europe, Vodafone says.

Across markets in Africa, Asia and Europe, active customers of M-Pesa increased by 27.1 percent in the year ended 31 March 2016, boosted by market launches in Albania and Ghana and supported by a network of more than 261,000 agents in 11 M-Pesa countries.

In India, M-Pesa enables Indian customers to pay for goods on Ebay, for taxis with TabCab and to book train tickets on India’s national railways.  Enterprises including Walmart are using M-Pesa in India to improve cash management and business efficiency, Vodafone says.

Can Telcos Become Platforms?

Telcos can become “Integrated Digital Service Providers” (IDSPs) that function as platforms, Accenture argues, essentially getting out of the “communications” business.

In yet one more iteration of the “moving up the stack” strategy, Accenture suggests telcos can become “platform companies” that use social, mobile, analytics and Internet of Things tools  to build a business architecture and set of services that enables other businesses to rapidly develop and deploy the products and solutions needed to drive their digital strategies.

That probably sounds like “middleware” to some; “operating system” to others.

Time will tell whether any firms actually will be able to become “digital platforms,” or whether, in the end, the effort will fail.

For more than a decade, we all have heard, seen and read commentaries suggesting that “digital disruption” somehow can be turned to a traditional telco’s advantage. Not all of the advice is wishful thinking, but let us be honest: nothing has really worked all that well.

Accenture consultants argue that  “transformation begins when operators update core technologies to digital and leverage existing assets—strong and trusted brands, unique locality, established billing relationships, robust networks, and a large quantity of unique customer and usage data—to compete more effectively.”

Let us be honest: we have been saying that, in different ways, for more than a decade. One might argue that telcos simply have not had time to make the full transformation.

Others might argue the transformation is growing exceedingly unlikely, based in part on the ability of many other entities--device, app, commerce, transaction providers--to bundle their own “access” as part of their services and features. In the end, it always will be difficult to compete with “free.”

source: Accenture

Orange to Launch Mobile-Only Bank

French telecom operator Orange is acquiring a majority stake in Groupama Banque, allowing Orange to create the mobile-only Orange Bank in France at the beginning of 2017.

Orange will own 65 percent of Orange Bank, while Groupama retains a 35 percent ownership.

Through Orange Bank, Orange and Groupama will offer all essential banking services over a mobile platform, including current accounts, savings, loans and insurance services, as well as payment.

The combined ambition for the two groups is to attract over two million customers in France. Plans call for expansion to Spain and Belgium as well.

“This agreement is a major step forward in our ambition to diversify into mobile financial services as we outlined in our Essentials 2020 strategy,” said Stéphane Richard, Orange chairman and CEO.

Orange's investment is part of its ambition to diversify its business, perhaps part of a potential trend: mobile operators becoming banks. That, in turn, is part of a larger effort by European and other mobile operators to avoid becoming dumb pipes.

Sometimes You Need the Big Picture

“Sometimes you need the big picture big picture, and it is often hard to find”, says Peter Stanforth, Spectrum Bridge CTO and Co-founder.

Hear more from Peter and other executives and regulators from across the region, discuss their thoughts on what will drive Internet adoption at Spectrum Futures 2016, 19–21 October 2016 at the Marina Mandarin Singapore.

Join the conversation at Spectrum Futures 2016.

AT&T Launches "Access" Program Providing Internet Access for Low-Income Households

AT&T has launched Access from AT&T  a new program designed to provide low-cost Internet access to lower-income households.

Qualifying households will get the fastest of three speed tiers--10 Mbps, 5 Mbps or 3 Mbps--available at their address.

Internet speeds provided at 10 Mbps and 5 Mbps will cost $10 a month, and Internet speeds at 3Mbps will cost $5 a month.

At&T also waives installation and Internet equipment fees for participating households.

Access from AT&T is available to households with at least one resident participating in the U.S. Department of Agriculture Supplemental Nutrition Assistance Program, or SNAP, and located within the 21 states where AT&T offers home Internet service over its fixed network.

TRAI Calls Indian Mobile Operators a "Cartel"

The Telecom Regulatory Authority of India castigated mobile operators in the Supreme Court during argument on the validity of TRAI’s call drop penalties, calling the industry a “cartel” that is

“interested in profiteering at the expense of consumers,” said  Attorney-General Mukul Rohatgi.

"This is a cartel of four-five players in a country of a billion," Rohatgi said. "They earn huge revenues and couldn't be bothered about consumer satisfaction."

Rhetorical flourishes aside, many observers of the Indian mobile market would say that is hyperbole unrelated to the realities of the market, which is by almost any measure the most-competitive in the world.

Profit margins have suffered accordingly.  

Bharti Airtel and Idea Cellular both posted higher year-on-year net profit in the fourth quarter ended on March 31, 2015.

But Bharti Airtel posted its first sequential profit fall in six quarters while missing estimates. Keep in mind those results include profits from international markets as well, not just India.

Idea, the country's third largest, met the lower end of analyst estimates.

The standout theme for both was the struggling voice business, which accounts for more than 80 percent of overall revenue.

Revenue per minute for Airtel and Idea continued to drop sequentially, dropping in the first quarter of 2015by 2.4 percent and three percent, respectively.

In fact, one might argue, so hyper-competitive is the market that suppliers do not have incentives to invest more heavily. Some believe the situation will worsen as Reliance Jio enters the market.

In 2011, for example, mobile firms in India did not recover their cost of capital. But some might argue earnings have at times in the past been in line with global norms.  

source: PwC

source: PwC

source: PwC

On the other hand, operating profit margins for the top five mobile providers in 2014 were in some cases in the low 30 percent range. Operating profit, of course, is not net profit, after all other business costs. Net profits in the 2014 telecommunications business were about 11 percent, according to Investopedia.  

Others would argue competition in the U.S. mobile market has had precisely that impact.

The analogy is investment by AT&T and Verizon in copper facilities and legacy voice, rather than next generation mobile networks. Simply, the money gets invested where the revenue, growth and profit lies, not in those parts of the business that are declining and provide low to negative profits.

The point is that profiteering is probably not a fair characterization of the Indian mobile operator business. In fact, low profits would explain behavior better than "profiteering."