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Indonesia Information Technology Report Q1 2013
Business Monitor International, December 2012, Pages: 77
BMI View: Indonesian IT spending is expected to reach US$6.7bn in 2012, up 12%, although BMI has downwardly revised its forecast due to our expectation of a deteriorating investment climate. BMI still expects the Indonesian market to be one of the region's fastest-growing IT markets over our five-year forecast period. In 2013, continued strength in government spending should offset an expected deceleration in household demand. PC penetration remains at below 10%, giving this huge market unrivalled long-term growth potential. Rising computer penetration and growing affordability should ensure that the market remains firmly in positive growth territory.
Headline Expenditure Projections:
Computer hardware sales: US$4.2bn in 2012 to US$4.7bn in 2013, +11% in US dollar terms. Forecast in US dollar terms downwardly revised after a slowdown in H112, but growing affordability and credit availability are driving sales in the consumer segment.
Software sales: US$687mn in 2012 to US$800mn in 2013, +16% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification although progress will depend on the success in bringing down illegal software use.
IT services sales: US$989mn in 2012 to US$1.1bn in 2013, +14% in US dollar terms. Forecast in US dollar terms unchanged, with a key growth area being cloud services, which could be worth more than US$100mn by 2017.
Risk/Reward Ratings: Indonesia's score was 42.7 out of 100.0. Indonesia remained fifth from bottom of the Asia region in our latest RRR table, behind the Philippines and ahead of Vietnam, Sri Lanka, India and Thailand.
Key Trends & Developments:
- An active approach by the government to encourage IT development, led by the National ICT Council, should stimulate spending through a series of infrastructure and education initiatives. The Indonesian government's Master Plan for Acceleration and Expansion for Indonesia Economic Development (MPEEI) states that connectivity between the islands of the country is a priority area. major government infrastructure and ICT initiatives, particularly the Palapa Ring Project, have been rolled out to create the infrastructure to support IT market growth.
- With ICT penetration of only 20% and development restricted to richer areas such as Java, the market has much growth potential. However, Indonesia's uneven development and digital divide are major barriers to faster growth within this potentially huge IT market.
- According to government data, there are 30-35mn Indonesian companies that still do not use ITbased solutions, representing a huge potential market. Modernisation is driving spending on applications such as CRM, ERP and financial management in key sectors such as financial services, telecoms, utilities, government, retail and manufacturing.
Executive Summary 5
SWOT Analysis 7
Indonesia IT SWOT 7
Indonesia Telecoms SWOT 8
Indonesia Political SWOT 9
Indonesia Economic SWOT 10
Indonesia Business Environment SWOT 11
Asia Pacific IT Risk/Reward Ratings 12
Table: Asia Pacific IT Risk/Reward Ratings, Q113 15
Asia Pacific IT Markets Overview 16
IT Penetration 16
IT Growth and Drivers 18
Sectors And Verticals 20
Market Overview 24
Government Authority 24
Table: Key Ministers And Departments 24
Table: Bandung High-Tech Valley SWOT 25
Special Focus: Banks 32
Industry Developments 33
Industry Forecast 37
Table: Indonesia IT Industry - Historical Data And Forecasts (US$mn unless otherwise stated), 2010-2017 39
Industry Forecast Internet 40
Table: Telecoms Sector - Internet - Historical Data And Forecasts, 2009-2016 40
Competitive Landscape 42
IT Services 46
Internet Competitive Landscape 47
Macroeconomic Forecast 48
Table: Indonesia - Economic Activity, 2011-2016 50
Company Profiles 51
Oracle Corp 56
Table: Oracle: Selected Acquisitions 60
Sigma (telkomsigma) 61
Country Snapshot 69
Table: Indonesia's Population By Age Group, 1990-2020 ('000) 70
Table: Indonesia's Population By Age Group, 1990-2020 (% of total) 71
Table: Indonesia's Key Population Ratios, 1990-2020 72
Table: Indonesia's Rural And Urban Population, 1990-2020 72
BMI Methodology 73
How We Generate Our Industry Forecasts 73
IT Industry 73
IT Ratings – Methodology 74
Table: IT Business Environment Indicators 75
Table: Weighting Of Components 76