Indonesia Telecoms Update 2023

Summary

Indonesia's telecommunications market is entering a new growth phase, propelled by one of the fastest-growing major economies in the G20 and a digital economy expected to roughly double its share of GDP by the end of the decade. The country's mobile operators are adapting their strategies as blended average revenue per user stays largely stagnant despite steady subscriber growth.

Competitive reshaping of the market has followed the merger that created Indosat Ooredoo Hutchison, alongside how operators are positioning for the gradual rollout of 5G spectrum through the middle of the decade. The balance between prepaid and postpaid subscriber bases, capital expenditure trends tied to network modernisation, and the industry's continued reliance on 4G as the dominant technology generation all factor into that picture.

Beyond core connectivity, Indonesian telcos are diversifying into non-connectivity revenue streams, building dedicated enterprise business units, and pursuing fixed-mobile convergence strategies to lift average revenue per customer. Regulatory developments, including a new data protection law following high-profile breach incidents, carry their own implications for telco cybersecurity investment.

Further market consolidation looks increasingly likely as operators seek scale and efficiency in an increasingly competitive, spectrum-constrained environment.

As connectivity revenue plateaus, where will Indonesia's telecom operators find their next growth engine?