Market Trends of Indonesia Telecom Industry
Increased Pace of 5G Roll-out Driving the Market
- According to the Telecom Review Report, the government has been actively developing various spectrum bands to support the 5G network. This includes farming and refarming the frequency spectrum across different bands, ranging from low to super high. In November 2023, industry stakeholders convened at Solo Techno Park, Indonesia's first 5G park, for the 5G Ecosystems Acceleration Summit. This summit aligned with Indonesia's Digital Vision for 2030 and 2045, provided detailed insights into emerging business trends, and elucidated the challenges and opportunities associated with deploying 5G solutions for consumers, homes, and businesses.
- The government is using its internet infrastructure to enhance its digital economy. In December 2023, Virtual Internet, a 5G software provider, partnered with PT. ABC to deploy its Virtual 5G technology across Indonesia. This agreement permitted PT. ABC to distribute an unlimited number of Virtual 5G applications. If fully utilized, this could result in up to 500 million licenses, each with an average annual subscription cost of USD 4.
- As per the Ericsson Mobility Report, telecom companies benefited significantly from offering 5G solutions to industries such as manufacturing, energy, utilities, and media. The report suggested that Indonesian telecom firms could have seen a 35% increase in income, amounting to USD 8.2 billion by 2030, by focusing on business-to-business (B2B) 5G services, despite the challenges in implementing 5G technology in the country.
- Furthermore, Bali had become the sixth city to receive 5G coverage, following Surakarta, Jakarta, Surabaya, Makassar, and Balikpapan.
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Higher Demand for OTT Services Driving the Market
- Over-the-top (OTT) services, including streaming video, Voice over Internet Protocol (VoIP), and messaging applications, have gained significant popularity in Indonesia. Telecom operators adapted to this trend by offering bundled services, partnering with OTT providers, or developing their own OTT offerings to remain competitive in the market.
- In May 2024, Vidio, a streaming platform based in Indonesia and owned by the local conglomerate Emtek Group, announced plans to increase its number of paid subscribers to 8 million within the next two to three years. This target would have approximately doubled its subscriber base, which was 4.1 million as of 2023.
- Furthermore, in May 2024, ZTE Corporation, a global provider of integrated information and communication technology solutions, and MyRepublic, an internet service provider, announced the launch of Indonesia's first Wi-Fi 7 product at ZTE Day 2024. This event marked a significant collaboration between ZTE and MyRepublic, highlighting their dedication to advancing technological innovation and facilitating the commercial implementation of Wi-Fi 7. By introducing the Wi-Fi 7 CPE, MyRepublic aimed to provide users with a network experience that offered unprecedented high speeds and low latency.
- According to a Future of TV analysis by The Trade Desk, OTT streaming experienced a meteoric rise in popularity after the COVID-19 pandemic. Over one in three Indonesians already streamed material over the top (OTT) as OTT became a popular form of entertainment where people could watch their favorite shows across devices whenever and wherever they wanted. Indonesia led in the Southeast Asian region with a strong 40% Y-o-Y rise in OTT consumption.
- Smartphone costs decreased, mobile broadband coverage improved, and internet access became more reasonably priced. The expansion of OTT in Indonesia was linked to these trends. OTT platforms adjusted their offers to attract these customers by considering consumer preferences. More local and Asian content was available on the top three platforms than on any other platform in Indonesia's Play Store entertainment category. A weekly payment option was available in Vidio's subscription configuration for its sports broadcasting service.
