Only Telkom Posts Good Results in Indonesia's Telecommunication Sector
In recent years, the telecommunication sector of Indonesia has been a tough arena for mobile phone operators. In terms of voice services, the once highly prospective industry has become more and more saturated over the years. Amid fierce competition tariffs for mobile phone services have been brought down significantly, while a new group of subscribers (from the poorer segments of society) have limited spending capacity. However, with the introduction of the increasingly popular smartphone, there is still room for growth.
Indonesia's Internet penetration is still relatively low at 25 percent of the total population in 2013. As the mobile phone or smartphone is the most common device used by Indonesians to access the Internet, it provides opportunities for telecommunication companies in terms of non-voice or data services. Although currently profit from call services remains to be the primary source of income for Indonesian mobile operators, the new focus of these companies is on high-speed broadband services.
When we compare net profit of the three major Indonesian telecommunication companies - Telekomunikasi Indonesia, XL Axiata and Indosat - only Telekomunikasi Indonesia (more commonly known as Telkom) showed growth in 2013. The main reasons why Telkom outperforms its two main competitors is because its products and services are available over a much wider geographical area in Indonesia and because it possesses more developed infrastructure.
| Company | Net Profit (loss) 2013 |
Growth (YoY) |
| Telkom | IDR 14.2 trillion | +10.5% |
| Indosat | (IDR 2.78 trillion) | -641% |
| XL Axiata | IDR 1.03 trillion | -63% |
Various sources
Telekomunikasi Indonesia posted a 10.5 percent increase in net profit over 2013 to IDR 14.2 trillion (USD $1.2 billion), mainly due to increased revenues from its subsidiary Telkomsel, a GSM and UMTS Mobile phone network operator. Fixed broadband services of Telkomsel rose 28.7 percent to three million users, while mobile data services increased 10.8 percent to 60.5 million users. Thus mobile data were a major source of revenue for the company. Over 2013, revenue generated through mobile data services rose 25.6 percent to IDR 15.1 trillion (USD $1.3 billion).