The total telecom and pay-TV services revenue in Indonesia is set to register a moderate compound annual growth rate (CAGR) of 3.7% between 2019 and 2024, driven mainly by the growth in the mobile data and fixed broadband services, says GlobalData, a leading data and analytics company.

According to GlobalData’s Fixed Communications, Mobile Broadband and Pay-TV Forecast Packs, mobile data will be the largest revenue-contributing segment to Indonesia’s telecom and pay-TV services market during the forecast period.

The revenue share of mobile data in the total telecom and pay-TV services revenue is projected to grow from 53% in 2019 to 59% by the end of 2024, mainly supported by the investments in the expansion of long-term evolution (LTE) networks to cater to the demand of data services.

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Hrushikesh Mahananda, Senior Analyst of Telecoms Market Data and Intelligence at GlobalData, says: “3G will continue to remain the most adopted wireless network technology until 2023. Meanwhile, 4G uptake will increase driven by the increasing demand for faster mobile data services and network expansion by major mobile network operators.”

Indonesia’s mobile subscription penetration is forecasted to grow from 128% in 2019 to 154% in 2024, led by the rising smartphone subscriptions and mobile network operators’ continued focus on 3G and 4G coverage expansion and the uptake of 5G services.

According to GlobalData Mobile Broadband Forecast Pack, the average monthly mobile data usage will increase from 2.1 GB in 2018 to about 7.9 GB in 2024, driven by increasing consumption of online video services and social media content over smartphones.

Mahananda adds: “Given the country’s complex geographical area, fixed broadband penetration in Indonesia remains comparatively low primarily due to a limited number of fixed lines and users’ preference for mobile platforms. However, over the next five years we expect strong growth in the fixed broadband market driven by operators’ investment in fiber network and government’s national broadband initiative.”  

For instance, in April 2019, XL Axiata planned to extend its 45,000km fiber-optic backbone network by a further 2,500km in order to provide better data network services to its customers.

Moreover in August 2019, the government completed the construction of a nationwide Internet network using fiber-optic, known as Palapa Ring, which connects the capitals of 514 districts and cities across Indonesia with a motive to boost broadband penetration and ICT usage, in line with the 2020 Broadband Plan initiative to extend Internet data services to rural and unserved areas of the country.

Mahananda concludes: “Competition in the Indonesian mobile market is set to intensify further as operators gear up to provide fast and reliable connections mainly due to the rising demand for mobile data and value-added services along with other dynamics such as price, quality and scope of network coverage. Moreover, a possible industry consolidation in the near future will push insolvent operators out of the competitive market.”