‘Indonesia’s Internet Indulgence’
Last week, the second Asia-Pacific Stevie Awards were held in Shanghai. These prestigious international business awards are presented to recognise the achievements of some of the region’s most pioneering companies. Each category has gold, silver, and bronze awards. Chinese companies won a total of 24 awards including gold awards in marketing, for MSLGROUP China, and Weber Shandwick. The big winners of the night though were Indonesian companies. Businesses from Indonesia won 33 of the Asia-Pacific Stevie Awards. One company took home five.
Indonesian telecommunications giant PT Telekomunikasi Indonesia, known as Telkom Indonesia, won five awards across different categories including for customer services, and business-to-business services.
Telkom Indonesia is based in the capital Jakarta, and was founded over a century ago in 1856. It is state-owned, and was part privatised in 1995, with 52.6% of the shares remaining in the government’s hands. Although its services have expanded beyond telecommunications, to business services, media, and even a university, Telkom is still very much the market leader in Indonesia. Telkom Indonesia boasts 1200 business clients, and more than 170 million total users of its mobile and internet connections. With Indonesia’s population at a quarter of a billion, Telkom Indonesia possess a near monopoly over the telecommunications industry. But this may be about to change.
For the eight companies who lay claim to the rest of the market, significant opportunities still exist. Like many emerging countries, Indonesia has more mobile SIMs than its population. It is estimated that SIM penetration is at 133%, and that 75% of the population is connected. This still leaves at least 25% of the market to play for, and this is without taking into account multiples. The dramatic growth of Indonesia’s telecommunications sector is remarkable. A branch of Telkom Indonesia, Telkomsel, has 125 million mobile customers. Indostat, a rival, has 63 million. In 1997, there were only 1 million in the entire country. Internet usage in Indonesia is rapidly rising also.
From only 42 million in 2012, the number of internet users in Indonesia is expected to reach 125 million this year.
Both Indostat and XL Axiata, Telkom’s main rivals in the industry, have seen their users grow significantly over the past few years. Indostat increased its usership by 6.1% in 2014, whereas Xl Axiata gained over 13 million users in 2014 alone. Clearly, the market for internet and cellular services will ensure that the telecommunications industry continues to grow. This presents significant opportunities for Telkom Indonesia’s smaller rivals to continue to expand their user base. Indonesia’s ever-increasing population demand that everyone is covered. It will take more than one company to make sure of that.
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