New Fixed Networks market report from Business Monitor International: "Indonesia Telecommunications Report Q2 2013"

Boston, MA -- (SBWire) -- 03/14/2013 --BMI View: Indonesia's telecoms market presents good growth opportunities due to its large and youthful population and extremely low broadband penetration rate. While the mobile industry generates low ARPUs in light of consumers' preference for prepaid subscriptions, and strong competition among operators and from alternatives such as fixed-wireless technologies, the long-term outlook is positive as operators are stepping up efforts to grow the nascent 3G market. Developments in the mobile data sector will also help to offset disappointing growth in the fixed broadband industry.

Key Data

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- We have revised our historical mobile subscriber data, notably the exclusion of Bakrie Telecom. According to the ministry's data, there were 211mn mobile subscribers in the country in 2010 and we estimate that this increased to 245mn in 2011 and 272mn in 2012. Consequently, our forecasts through 2017 have been adjusted accordingly.
- While Telekomunkasi Selular (Telkomsel)'s blended ARPU continued to trend downwards on a y-o-y basis, rivals Indosat and XL Axiata managed to buck the trend in Q312. Nevertheless, we forecast ARPU levels to steadily decline largely due to competition, high percentage of prepaid subscriptions and slow 3G adoption.
- We have again revised our estimate for Indonesia's fixed broadband market due to new data from the International Telecommunication Union, Nonetheless, we continue to forecast that growth will remain muted as customers opt instead for mobile broadband services.

Key Trends And Developments

Kementerian Komunikasi dan Informatika announced in late December 2012 that the process for the muchdelayed 3G auction has kicked off. Operators will go through a variety of processes such as documentation and meetings with the ministry's committee before participating in the auction in March 2013. The auction for the final two blocks of 3G spectrum was originally scheduled for September 2012 but was delayed after Telkomsel was declared bankrupt.

Axis Telekom plans to sell 1,600 telecoms towers in a deal worth around US$300mn. The operator is reportedly in talks with independent tower firms Tower Bersama and Sarana Menara Nusantara, which have expressed interest in the transaction. This development is part of a growing trend in Indonesia's telecoms market, where the need to improve cost-efficiency amid fierce competition and increasing market saturation is imperative.

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