We are looking for a investor for our business in the telecommunication industry in Indonesia. The deal is almost secure as an agreement is in the preparation and approval stage. Technical has started kick off meeting running simultaneously as we expected to launch this service by 1st May 2011.
Indonesian Mobile Market Outlook
The general telecommunications industry in Indonesia is currently focusing on rapid capital expenditure investments. Based on the forecast by its Postal and Telecommunication Department, the country is expected to intensively wiring itself by having a total of 20,000 telecommunication towers over the next five year period.
Current focus on Application Service Providers (ASP) is on social networking (such as Facebook and Twitter apps), content carts (e.g Islamic, music, pictures etc) and service notifications. We see the stage is ripe to introduce this service due to the following circumstances: -
i. Inefficient Distribution Network
The current distribution network in Indonesia is hampered by inefficient distribution layers. It is the norm for customers to pay more than the face value of the air time they are procuring. For instance, air time valuing at Rp10,000 would have a selling price varying from Rp12,500 to Rp14,000, depending on where one is to purchase it. It is a stark difference to Malaysia whereby consumers pay only the face value of the air time they purchase.
ii. Consumer Growth
It is expected that the country’s mobile users’ penetration and growth to be around 20% over the next five years. Currently, Telkomsel (a subsidiary of Telekom Indonesia, a Government Controlled Company) is having the lion share of the market, controlling 50% of the market share of mobile subscribers. Telkomsel themselves expected its subscribers to increase from the current 95 million to 128.6 million by 2014.
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