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1. Telkomsel Serves More Than 100m Subscribers Telkomsel the biggest Indonesian Cellular Operator announced the number of...

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“This amount is the number of qualified customers. Telkomsel has strict standards for its customers,” said Sarwoto Atmosutarno, President Director of Telkomsel, while delivering a speech in the “Inauguration of 100 Million Customers” in Ballroom 3 Ritz Carlton Hotel, SBCD, Jakarta , On Tuesday (04/26/2011).

Telkomsel categorizes the SIM card users as high quality when they actively use the cellular card. “If during the three months not making a call or be called for example, automatically removed from the list of customers,” added Sarwoto.

With the achievement of targets 100 million subscribers, Telkomsel has a strong foundation to be beyond telecommunication service based on the data.

In these transformation efforts, in 2011 Telkomsel will invest in capital expenditure worth $ 1.1 Billion U.S. Dollars (about Rp 10.9 trillion) of which 60 percent was allocated to increase broadband services.

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XL’s CEO Hasnul Suhaimi said that the increment mostly happened in last quarter.
“In the last 3 months of 2010, we noted the increment of subscribers was very high, especially in Central Jawa Tengah and Yogyakarta,” he added.
According to Hasnul, the subscriber increment in this year will not as high as 2010, this is beacuse of market saturation, namely 90% of Indonesian population has have mobile number.
XL just targets the increment of 11%-12%. This means at the end of 2011 the XL subscribers will reach 44.5-44.9m.  We always want to grow more than industry namely above 10% each year.

Hasnul also added that the company strategy will not play on tariff of voice and SMS anymore, as now the figure is keeping lower since last year.

“If we play on tariff for these two services, it will impact the quality. Besides that, the SIM card business was not as big as last year, it will be worthless to reduce the tariff as new customer will be small.”
XL will focus on data services which continues to grow its contribution. It is estimated that in 2010 contributed to the data service by 9% -10% of total company revenue. In 2011 it is expected to increase in the range of 15% to 20%.
“Overall revenue grows for 2010 was above 20%.”

According Bisnis Daily, up to third quarter 2010 XL noted a significant increase in performance. In terms of revenue, the company managed to score at Rp13 trillion rupiah, or up 32%
compared to the same period last year.
Meanwhile, net income rose 73% when compared to the same period in 2009 of Rp2.1 trillion . Until that time, XL has 38.5 million subscribers.

XL prepare a capital expenditure of U.S. $ 500 million that will be used to build the 1500-2000 base stations, increased network capacity, and build an optical fiber.
“The amount of capital expenditure was moderate. It could be revised in some times if needed more money. We use internal funds to meet capital expenditure, “said Hasnul. (Bisnis daily)

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With this request, from 5 3G operators, only Hutch which does not request additional bandwidth. It implies that both operators have greater demand in data service and internet broadband than Hutch. Meanwhile Telkomsel and Indosat have requested this additional bandwidth and got it last year. Additional spectrum bandwidth will make the network performance of these operators better and serving more subscribers. In addition, customers will be more comfortable because it’s easier to broadband service connection speed and higher capacity.

When the requested approved, both operators should pay for the spectrum levy according to the price of 2006, namely IDR 160b per year. Besides that, they also have to pay upfront fee, 2xIDR 160b.

According to Hasnul Suhaimi, XL’s CEO, additional 3G bandwidth is a step toward 4G technology implementation. 4G implementation is still far away although traffic data is getting higher and higher.

Both XL and Axis also requested International Direct Dialing License (IDD).  Both operators lose in IDD license tender three years ago from Bakritel. Favorite XL was failed because of incomplete administrative reason, while Axis because of higher proportion of foreign shares. Both operators believe that the IDD market is still high and current provider (Telkom, Indosat and Bakrie) can not fulfill all the demand.

Telkom is the leader in International call with 53% of market, followed by Indosat and a small portion of them to Bakrietel.  International call was 70% outwards while 30% are inwards.  Total duration of the call is around 3 billion minutes.

Syakied Sungkar , Axis’s VP Sales and Distribution said that “If Axis is given a IDD license, we will make the IDD call rate very competitive. ” Customer will get benefit with this competition. However, so far there is no indication for second tender of IDD license.

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In contrast to the PT XL Axiata, two other major mobile industry, Telkomsel and Indosat have decreased profits, and the largest suffered by Indosat. The profit of cellular operator owned by Qatar Telecom (Qtel), went down 71.5 percent compared to the first half of the year 2009. From IDR 1.007 trillion to only IDR 287 billion. Though its earnings rose 5.8 percent in the same period, from IDR 9.135 trillion to IDR 9.662 trillion. Meanwhile Telkomsel, the biggest cellular operator in Indonesia also has decreased its net profits for about 4 percent from IDR 6.2 trillion to IDR 5.9 trillion only. The same condition with Indosat, Telkomsel also has increased its revenue from IDR 20.6 trillion to IDR 22.9 trillion.

XL’s high profits was trigger by the massive increment of the subscribers. At the end of June 2010, XL noted 35.2 million subscribers, grew 43 percent compared to 24.7 million in the first semester of 2009. This figure  is just 2.6 million below Indosat’s subscriber. If XL can be consistent with their achievement, we may see XL as the second biggest cellular operator at the end of 2010.

Telkomsel is still working hard in achieving their total subscriber target. At the beginning of 2010, they just had 82 million subscribers and at the end of June 2010, this figure was around 88.3 million, which was still far away from their end year target 100 million subscribers. They still have 6 months from July to achieve this target.

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The total number of the subsribers of this three biggest cellular operators in Indonesia are around 150 million subscribers. Then the total churn subscriber for these operators are just below 15 million subscriber, a big number for SIM (subscriber identification module) card business. If we also calculate other cellulars operator, the figure can reach 18 million. For your information, Indonesia has 11 cellular operator, 5 of them are using GSM-3G technology while the other 6 are using CDMA technology.

Many people blame the cheap starter pack is the main reason of high churn rate, not to mention subscribers which are unsatisfied with their current service provider. You can have a started pack for less than US$5 with the equal number of credit. So, the operators get nothing when a new subscriber register. On the other hand, SIM Card provider who gets benefits from new registered subscriber.

Cellular operators have to create a new strategies to lower down the churn rate. They just create the business to other party otherwise.

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Tonda Priyanto ASSI Chairman expressed the main use of transponders is still for the backbone network for GSM mobile access.

“In addition to the GSM backbone, the use of satellite transponder is also widely used for VSAT networks (very small apperture transponder),” he told Business Today.

Driven by increased use of VSAT rural telephone administration (universal service obligation / USO), Internet service provision project districts, and data networking needs of national companies and government.

Based on ASSI data, the number of transponders in Indonesia has currently reached 200 units, both from local and foreign satellite satellite which has landing rights in Indonesia.

Meanwhile, Eddy Setiawan a consultant in a number of satellite operators said the lease per transponder on average per year is U.S. $ 1 million. Assuming there are approximately 110 units of transponders operating in Indonesia, then the value of business per year reach U.S. $ 110 million.

“That’s only transponder lease, if the VSAT industry is also calculated, then from VSAT earn U.S. $ 152 million per year for a total of approximately U.S. $ 262 million,” said Eddy, a LAPAN (National Aeronautics and Space Institute) consultant.

Former ASSI Secretary General said that this figure does not include the direct-broadcast and television business to home (DTH). (from: bisnis.com)

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The negotiation shall be started to reach the win-win solution. As we know, Telkom Flexi is the biggest CDMA operator in Indonesia with currently 15 million subscribers, while Bakrietel Esia is the second with just below 10 million subscribers. When the merger happened, the CDMA market will be monopolized by these operators.

There were different views about this merger. Some argue that this merger will make unhealthy competition in CDMA business. They will dictate the market as they have 80% of the market share. Some others see there are several advantages of this merger for both companies. Telkom and Bakrie can deliver better services to all subscribers since they have adequate bandwidth to play with. They will have more efficient cost both in operational and expenditure.

Above all, we as the customer, not only want better services but also affordable tariff.

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At the end of 2009, the number of Indosat’ subscriber was down to 28.6 million, from 36.4 million at the end of 2008. Meanwhile, XL’s subscriber was 31.4 million, increased quite significant number, 5.5  million, from just below 26 million at the same period. Telkomsel was still the leader with more than 81 million subscribers.

In the fixed wireless access, Telkom flexi continues their lead with more than 15 million subscribers, followed by Bakrietel Esia with almost 10 million.

For new entries, HCPT led with 7.3 million subscriber followed by Natrindo Axis with 4.1 million.

The complete data can be found below.

Source: DG Postel

Total subscribers (Fixed, FWA and Cellular)  were:

2005: 60,499,948
2006: 78,623,748
2007: 112,916,388
2008: 170.956.314
2009: 193,205,530

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According to the BWA tender result, PT. Rahajasa Media Internet (Konsorsium Wimax Indonesia) won in 3 regions (Papua, Maluku and North Maluku, and Riau Islands (Batam and Bintan) with the total bidding value almost IDR 2.7 billion for 3 regions. Meanwhile Konsorsium PT. Comtronics Systems with PT Adiwarta Perdania also won in 3 regions namely West Java (outside Bodetabek), Central Java and East Java with the total bid almost IDR 74.5 billion. Internux was the winner for Jabodetabek with the bidding price of IDR 110 billion.

With this situation, West Java will only be supplied by IM2, Central and East Java by Telkom, Papua and Maluku with North Maluku by Telkom and Riau Island by Berca Hardaya Perkasa.

Telecommunication Business owners are still waiting for the following regulation since the absence of the second winner for that 7 regions.

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