| Telecommunications |
Telecommunications sector, especially in the cellular phone industry is one of the fastest growth industries in Indonesia. In 2001, cellular phone utilizing growth level increased by 60% and since then the growth is still continuing to increase drastically in the next coming few years.
On that account, it’s not surprising that the sales of cellular phones in Indonesia are one of the highest worldwide after China. Ironically, the penetration in Indonesia is the lowest in Asean. |
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One of the causes of cellular phone penetration growth is the limitedness of fixed line facilities and geographical condition in Indonesia. The cost per-line that has to be invested and maintained by the fixed line telephone operator is very high. Cellular or wireless telecommunication is the perfect answer.
The next few charts will accommodate the massive investments and aggressive market penetration condition of Indonesia telecommunication sector.
The Development of Cellular Phone Operators 2005-2007:
GSM Operators (Estimation)
M : million |
| |
| No. |
Operator |
Frequency |
Subscribers |
Products |
| 2005 |
2006 |
2007 |
| 1 |
TELKOMSEL |
900MHz / 1800MHz |
20M |
35M |
50M |
GSM, 3G |
| 2 |
INDOSAT |
900MHz / 1800MHz |
14M |
16M |
20M |
GSM, 3G |
| 3 |
EXCELCOM |
900MHz / 1800MHz |
3M |
9.2M |
13.5M |
GSM, 3G |
| Total: |
37M |
60.2M |
83.5M |
- |
|
| |
CDMA Operators (Estimation)
M : million |
| |
| No. |
Operator |
Frequency |
Subscribers |
Products |
| 2005 |
2006 |
2007 |
| 1 |
FLEXI |
800MHz |
3.700.000 |
4.100.000 |
6.000.000 |
Handset/FWP |
| 2 |
FREN |
800MHz |
800.000 |
1.800.000 |
2.500.000 |
Mobile / EVDO / Data |
| 3 |
ESIA |
800MHz |
500.000 |
1.300.000 |
3.000.000 |
FWP / Data |
| 3 |
STARONE |
800MHz |
100.000 |
250.000 |
1.000.000 |
FWP / Data |
| 3 |
CERIA |
450MHz |
0 |
120.000 |
500.000 |
FWP / Data |
| 3 |
SMART |
1900MHz |
0 |
0 |
800.000 |
FWP / Data |
| Total: |
5.100.000 |
7.570.000 |
16.700.000 |
- |
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There are two main technology in cellular network worldwide: GSM (Global System for Mobile Communication) and CDMA (Code Division Multiple Access). In Indonesia GSM technology has been introduced in middle 1980. GSM technology been used in Europe and in Asia. CDMA been used in the US, South Korea and some parts of Asia. In Indonesia, GSM is very popular because of the various handsets availability and accessibility. On the other hand, CDMA was recently introduced in Indonesia. |
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| Bellows are some superiority of CDMA network compared to GSM network: |
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| 1. |
It could be operated as fixed phone and also as mobile phone |
| 2. |
Third Generation of CDMA, the CDMA 2000-1x has the ability to transfer maximum data up to 153 kbps (kilobyte per second) with throughput mobile 60-80 kbps. Compare with the GSM data transfer (through GPRS) which only able to 115 kbps with throughput mobile 30-40 kbps. With this kind of ability, downloading content, sending big size file between CDMA users, playing videogames with enemy from different places or receiving current information of traffic by the assistance of GPS (Global Positioning System) it can be access easily. In the other word, CDMA technologies are very comfortable for multimedia services. |
| 3. |
Downloading song with 3 minutes duration only will need 78 seconds while with GSM, it’ll need 41 minutes. |
| 4. |
At present, there is a newest generation of CDMA has been launched, it’s CDMA 2000-1XEV-DO with the ability to transfer data up to 2,4 Mbps (megabyte per second). The ability to do the video streaming from this technology gave advantages on application that used broadband services so that we can enjoy live performance swiftly. |
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| CDMA in Indonesia is recently introduced. The CDMA subscribers in Indonesia are relatively smaller, it’s just 2,3 million on 2004, but the development per year reaches 50% . This relatively fast growth possibly caused by: |
| |
| 1. |
There are increasing of communication users through cellular phone. Besides as media spoken communication also as media data transfers, as personal and specifically for business needs. |
| 2. |
Various kind of handsets availability. Cheaper and better. |
| 3. |
CDMA charges cost relatively cheaper. |
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The following chart will explain the massive growth in CDMA and 3G (GSM) for the past few years:
Mobile Phone Total Market By Network, 2006-2007: |
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| These are the main factors that supports this growth: |
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| 1. |
Continuous Innovation: It’s not just a commodity product. Cellular phone manufacturers are continuously developing and marketing new products with features that integrate with other devices. Fashion, entertainment and telecommunication in one product. |
| 2. |
Variety Price: The market distribution divided into 3 categories: low end/entry level, middle end and high end made the handset market really accommodative to buying aspect of various society classes. |
| 3. |
Network Effects: The continuous drastic change in pulse charges. Cheaper and better coverage. |
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Commoditization: Cellular phone has become the main device that we must carry every minute. Moreover, it has also become a “fashion” gig into our everyday lifestyle.
These research data shows that there is still great potential for other Global brands and in-house (own) brand development and penetration. |
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