Telco in Numbers: Indonesia
I have posted bits of information about Indonesia telecommunication in my previous post here. This time, I want to discuss more into the consumer mobile sector: how big it is, who is the major players, dynamics, and the customer behaviours.
Indonesia Mobile Telecommuncation players used to be more than 5 players. However, consolidation has happened in the past 10 years, leaving only 4 players today: Telkomsel, Indosat, XL, and Smartfren.
Mobile Customer Market Share
By size of customer base in first-half 2023, Telkomsel lead by 153 million subscribers, followed by Indosat Ooredoo Hutchinson with 100 million subscribers, XL with 58 million subscribers , and Smartfren with 35.5 million subscribers (Smartfren data is based on Nov 2022 period).
Average Revenue per User (ARPU)
The most common business metric to look at in telco sector is ARPU, Average Revenue per User. It is the metric to calculate how profitable a mobile service providers at individual subscriber level. Given the dynamics of the mobile service pricing, ARPU serve as the simple metric to understand the price strategy from each company. In terms of ARPU, Telkomsel is far superior compared to the other players. Telkomsel’s ARPU is benefited from big chunk portion of revenue from voice and SMS services while the other players have dominant revenue from data service — data service revenue price is relatively lower compare to voice and SMS services.
Base Transceiver Station (BTS)
One of the enabler of mobile connectivity is Base Transceiver Station (BTS). BTS emit incoming and outgoing signal of mobile devices so that customers are able to communicate with each others. BTS is a device that is being placed in a small-thin tower and being placed in the area to ensure all areas are being covered by the signal.
This metric is also dominated by Telkomsel with 228k BTS, followed by Indosat with 215k BTS.
By coverage, Telkomsel coverage is far beyond the other three players. Looking into the map, the Java Island area is covered by all the players while the non-Java area, especially the eastern of Indonesia, it seems only Telkomsel that has the most service available (Source).
Spectrum
Think of mobile connectivity just like the how our radio inside the car can get signal from the radio station: The radio station broadcast its voice while the listeners, tune their radio receptor into certain radio wave so they can listen to the broadcast. In mobile telecommunication, radio spectrum, a range of radio waves, is being “rented” by the government so it can be used to provide telecommunication services. Of all players, Telkomsel and Indosat have “rented” a relatively wide spectrum band compare to XL and Smartfren. Having a wide spectrum band can help the mobile operators to emit signal more effectively so that the quality of telecommunication is great.
Based on the spectrum ownership above, Telkomsel and Indosat Ooredoo Hutchinson dominate the spectrum ownership in Indonesia.
These four most basic telecommunication metrics are commonly used in other countries all around the world. It can provide a super easy navigation to understand the telco competition landscape in any country.
Overall, we see that Telkomsel and Indosat seem to have a solid infrastructure with massive number of BTS and major spectrum ownership. However, given that Indosat has just merged, the company have not yet capitalized yet — as reflected in the customers and ARPU achievement compared to Telkomsel.
