Indonesia Telecoms Industry Report: Key Developments, Growth Prospects, and Investment Opportunities
Welcome to the Indonesia Telecoms Industry Report, a comprehensive overview of one of the world’s fastest-growing telecommunications markets. As data infrastructure becomes increasingly critical in our connected world, the telecom sector plays a vital role in national economies, attracting large infrastructure funds and driving economic growth. Despite political uncertainties and the inflationary pressure’s economic impact, the Indonesian telecommunications industry is expected to remain steady due to its defensive nature.
Key Developments Covered in the Indonesia Telecoms Industry Report:
- Merger of Indosat and Tri Indonesia
- Acquisition of Link Net by XL Axiata
- Consolidation of towecos
- Launch of 5G services
- FTTH investments drive strong growth in consumer fixed broadband services
According to the publisher, 5G mobile subscribers are projected to represent 78% of all subscriptions in Indonesia by 2031. By 2031, the Indonesian market is projected to have nearly 300 million 5G subscribers.
The Indonesian telecommunications market thrives as a mobile-centric industry, featuring four large network operators and a dominant fixed-line provider with a near-monopoly. Strong economic fundamentals underpin the overall market, positioning Indonesia as one of the fastest-growing telecom markets globally. The growth is driven by both mobile and fixed broadband subscriptions, with the publisher forecasting continued strong growth in mobile subscriptions from 2024 to 2031, following a temporary slowdown in 2018. Fixed broadband subscribers will also experience sustained growth, accompanied by an increase in household penetration.
The main drivers of growth in the telecoms sector are expanded coverage, greater affordability, service improvements, increased data usage, and higher smartphone penetration. Indonesia continues to expand its fiber-optic network and 4G coverage through significant capital expenditure investments. The telecoms sector has witnessed rapid investment growth, and this momentum is expected to be maintained throughout the 2023-2030 period.
The publisher predicts strong overall growth in the telecoms market until 2031 with more capital investments required outside of Java, phasing out of 3G nationwide to make room for 4G to all Indonesians.
Capex Investments
The Capex to GDP ratio has remained relatively stable between 2017 and 2023. Telecommunications operators are investing heavily in expanding their 4G coverage and capacity to meet the growing data demand and smartphone adoption. The publisher projects an average Capex spending growth of 3.9% between 2024 and 2031.
Mobile Subscribers and Revenue
The mobile subscriber penetration rate experienced a temporary decline in 2018 and 2023 due to new SIM registration requirements and the phasing out of 3G. However. The publisher forecasts a resumption and acceleration of growth of 1.5% during the 2024-2031 forecast period.
Mobile network operators face competitive pressure as the market shifts towards unlimited voice, text, and data offerings. Indonesia’s mobile data pricing is expected to catch up with neighboring countries as 4G coverage accelerates and smartphone penetration increases, especially in regional areas.
Broadband Subscribers - FTTH Push
The publisher expects sustained broadband subscriber growth driven by household expansion and improved connectivity for previously underserved premises through FTTH services.
The Indonesian fixed broadband market is experiencing strong year-on-year growth and is expected to continue growing from 2024 to 2031, with lower pricing targeting new layers of lower socio-economic with prepaid packaging. The expanding middle-income class in Indonesia, with a growing appetite for high-speed data, is driving fixed broadband adoption and household penetration.
Thematics - Telecoms Infrastructure, 5G, M&A, e-Commerce
The completion of the Palapa Ring national broadband network has laid the foundation for enhanced connectivity. The arrival of 4G transformed the internet from desktops to handheld devices, while 5G has the potential to revolutionize virtual and augmented reality experiences and autonomous vehicles. The outcomes and benefits of 5G, including business models, investments, and timelines, are yet to be fully understood.
Investment funds are valuing telecommunications infrastructure assets, such as mobile towers, data centers, submarine cables, and fiber infrastructure, with high valuation multiples. The report highlights real market examples and benchmarks to provide insights into investor views and valuations.
Telecommunications operators are heavily investing in both fixed and mobile segments, upgrading their 4G network infrastructure. The publisher expects a wave of consolidation in Indonesia, potentially starting from 2022-2023, driven by squeezed margins and the upcoming 5G Capex cycle.
Increased smartphone penetration, fueled by the availability of affordable devices, has led to significant growth in e-commerce. Leading players like GoJek, Tokopedia, Grab, and Bukalapak dominate e-commerce, ride-sharing, and mobile payments, capitalizing on Indonesia’s emerging middle class with higher disposable income.
Explore the Indonesia Telecoms Industry Report to gain in-depth insights into the market trends, investment opportunities, and the transformative impact of technology on the telecommunications sector in Indonesia.
Why You Should Buy This Indonesia Telecoms Industry Report:
- Benefit from the latest market opportunities
- Understand the threats to your operations and investments and protect your company against future risks
- Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
- Get a full view of the competitive landscape to assess your market position.
- Forecasts as a key input for successful budgeting and strategic business planning in the telecoms market
- Target business opportunities and risks in the telecoms sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments
- Assess the activities, strategy and market position of your competitors, partners and clients via our Operators Profiles
The Indonesia Telecommunications Industry Report, 2023-2030 includes an overview of the Indonesian market dynamics, market sizing, market forecasts, analysis, insights and key trends.
Table of Contents
Companies Mentioned
- BizNet
- Centratama
- DigitalBridge
- EdgePoint
- FiberStar
- Gihon
- GoJek
- IBS Towers
- IndiHome
- Indosat
- Kabel MNC Play
- Link Net
- Mitratel
- MyRepublic
- Protelindo
- Smartfren
- Telkom
- Telkomsel
- Tokopedia
- Tower Bersama
- Tri Indonesia
- XL Axiata
Methodology
The publisher uses primary and secondary research as well as proprietary information sources to generate market analysis and forecasts for fixed and mobile services in terms of both subscribers and revenue. Interviews are conducted with key service providers in the region to determine current and potential market sizing as well as future service offerings. Information gathered through interviews is further cross-checked to validate the total market size.
The primary research is supplemented with a range of secondary source material, including related research, press releases, securities filings, media, Web-based materials, and trade publications.
Industry and population statistics are also leveraged for reference and to ensure consistency in the data collection. Extensive service provider primary and secondary research, together with the publisher's end-user research database, provides a strong basis for sizing and forecasting the market. The multiple reference points allow for validation of information provided by the service providers compared with that gathered from alternative sources.
Note: Forecasts are made in local currency, and no allowance is made for inflation. All numbers in this document may not be exact due to rounding.
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