Reading the Landscape, Guessing the Future Mobile Business Model in Indonesia (Part 2)

Telecommunication Business Journey

In this global, transparent and competitive era, the telecommunication industry has exceeded the drastic and rapid development. The competition was already very tight, it pushed the players to change the strategy to be more reliable and precise. More particularly for Indonesia and other countries in the ASEAN clumps that were getting ahead of the arrival of a new era of competition, i.e. The ASEAN Economic Community (AEC) by the end of 2015. The telecommunication industry must look ahead to the future. For the bright, digital, connected, open, and secure future of the industry. With digital as the center of the challenge, will soon be seen all things that are connected in an integrated manner between people, processes, and data to be more relevant and gives a better value for life. Telecommunication also have to transform information into action that will create new capabilities, enriching experience, as well as economic opportunities for individuals, businesses and countries. For example, such as connection of teachers and students without classrooms, a doctor with a medical instrument remotely, car with a car park, a housewife with a supermarket, community and city. And everyone will be screaming for cloud computing, big data, speed, internet, and so forth. These signals are pointing towards the digital age is already very real.

Telecommunication is also a sector that offers convenience, competition and choice. Offering public and business sector on all products that tailored to market’s demand. And users have willingness to pay, as well as ready to pay and queued for a new smartphone. The telecommunication sector has abilities to invest and innovate, which are the economic scale should be able to think big, beyond the limit, and compete globally, with a fast network capacity to support the future of digital.

The global telecommunications business development, shown in data as a drastic growth, where the number of mobile users are reached nearly 7 billion users as reported by ITU (end of 2013 report). The half of them (3.6 billion) are in Asia Pacific. Although the growth has slowed (2.6% globally), it shown that the cycle has reached the saturation level, with nearly 89% penetration in Asia Pacific. While the use of mobile broadband data will continue to exponentially elevate the growth in double digits. Mobile broadband subscribers, according to ITU data has reached 2.3 billion, which include penetration by 84% driven by growth in developing countries, including Indonesia, as can be seen in the figure below. Meanwhile, fixed telephone (fixed wireline) and fixed broadband slowed down. Thus, it seems global, fixed line business is indicated has no longer future in the telecommunications business. Furthermore, mobile will become the main business in the future.

Regional Mobile Users Growth and the Penetration

Source: ITU, 2013

Regional Mobile Broadband Growth and the Penetration

Source: ITU, 2013

ASEAN in regional perspective data showed a huge market potential in the era of one market and production center for one community. ASEAN as a political and economic community in Southeast Asia consists of Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos, and Vietnam, is the one of the centers of all mega trends in Global and Asia Pacific. With a total population of over 625 million people by the end of tahun2013, or 8.8% of the world population, and with nominal GDP has grown by more than USD 2.4 trillion (ASEAN published data in SWA Magazine edition October, 2014).

However, behind that promised opportunities and the growth potential of the industry, there is an interesting consumer behavior to be observed as a step to prepare a strategic competitive advantage in the future. Indeed, the data bandwidth consumption are driving the traffic revenues, whereas revenues were still far behind the traffic, it reflects MNO’s cost of supply. International Data Corporation (IDC, 2013) report that global mobile industry has indicated a decline phenomenon in Average Usage per User (ARPU) of basic voice services in Asia Pacific, above IDR 25,000 per month in 2008 to be less than IDR 15,000 per month, while data traffic surge from 500 petabytes per month (2011) to 2.500 petabytes per month (Informa, 2014).