Boston, MA -- (ReleaseWire) -- 01/15/2013 -- BMI View: Indonesia's telecoms market presents good growth opportunities due to its large and youthful population and extremely low broadband penetration rate. Although incumbent operator PT Telkom 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. The healthy competition in the mobile/fixed-wireless market brings cheap services to consumers, but declining ARPU and usage levels for operators.
- The mobile market picked up on a quarterly basis in Q212, although the y-o-y growth was the slowest ever recorded. We forecast mobile penetration will hit 173.5%, with nearly 444.8mn mobile subscribers at the end of 2017 .
- Mobile growth in Q212 was led by Telkomsel which signed up over 7.3mn net new customers.
- ARPU and MOU levels remain on a downward trajectory with an extremely high proportion of prepaid customers unlikely to change any time soon.
- We have revised our 2011 estimate for Indonesia's fixed broadband market but we forecast that growth will remain muted as customers opt instead for mobile broadband services. We forecast that fixed broadband penetration will rise to only 1.4% by 2017.
- We continue to expect the fixed-line market will post modest growth in 2012, reaching 45mn subscribers and penetration of 18.4% by year-end. However, we predict growth rates will taper off and by 2017 there will be just under 55mn subscribers, penetration of 21.6%.
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Key Trends And Developments
In early October the Ministry of Communication and Information Technology postponed a tender to allocate 3G frequencies, which was originally scheduled to take place at end-September. This was the fourth time the third phase of 3G bidding had been postponed since its original date in June. The decision was made after Telkomsel was declared bankrupt by the Commercial Court of Central Jakarta as it was not able to pay debt off IDR 5.3bn (US$546,960) to Prima Jaya Informatika, its prepaid phone voucher distributor. The decision to postpone the tender may result in the ministry being accused of being biased towards Telkomsel and that could also result in the authorities being in a breach of competition and monopoly law.
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