ASEAN KEY DESTINATIONS
Operators hopeful of revenue boost with 4G/LTE services
Telecommunications operators expect that revenue from data subscription will be on an upward trend as commercialized 4G/LTE services on the 1,800-megahertz (MHz) frequency band have just been rolled out, providing better Internet speeds than those on 900 MHz at present.
Major Global System for Mobile Communications (GSM) operators PT Telekomunikasi Indonesia Selular (Telkomsel), PT XL Axiata and PT Indosat have recently launched their commercialized 4G services on the 1,800 MHz frequency band in a number of cities, highlighting a new outlook in the country’s telecommunications industry.
The new service, which is expected to live up to the ideal 4G speed of 100 megabytes per second (Mbps), will help operators net more data-heavy consumers to eventually boost the industry’s average rate per unit (ARPU).
The new service would provide the right momentum for telecom providers to improve their ARPU level, according to PT Sucorinvest Central Gani analyst Inav Haria Chandra, citing precedents in countries that had adopted 4G earlier.
Indosat president director Alexander Rusli said his firm was upbeat that its ARPU would climb with the new 4G service, like when it went up during migration from the 2G to 3G network.
“We hope that our ARPU per kilobyte will double sometime next year when adoption of 4G smartphones is expected to start taking off,” he told The Jakarta Post.
Indonesia’s mobile broadband price per 500 megabytes (MB) hit US$2.4, trailing behind Cambodia and India with $2.8 and $3.4, respectively, according to a report from the International Telecommunication Union (ITU).
The relatively low price of Internet data packages, coupled with pressure from the weakening rupiah, is believed to have contributed to lackluster performances of the country’s major operators.
Telkomsel, which has recently launched commercialized 4G on 1,800 MHz in Makassar, South Sulawesi, was the only operator to pocket a huge profit in the first quarter of this year, as reflected by consolidated revenues of its parent company PT Telekomunikasi Indonesia (Telkom).
Telkom saw its net profit rise 6.1 percent year-on-year (yoy) to Rp 3.81 trillion ($286.3 million) in the January-March period this year, hugely driven by surging data, Internet and IT services.
Telkomsel itself targets to boost its number of 4G subscribers, from around 700,000 subscribers in Jakarta, Bali, Bandung, Surabaya, Medan and Makassar at present.
XL, which last week launched its 4G service on 1,800 MHz in Lombok, has previously predicted that a significant contribution from 4G services would be seen within two years, when many more affordable 4G smartphones would be available on the market.
The government has officially issued a regulation requiring 30 percent local content for 4G smartphones by 2017, expected to prompt more partnerships among global and local smartphone manufacturers to provide more affordable handsets for end-consumers.
In a separate development, PT Smartfren Telecom, which offers 4G smartphones bundled with its Code Division Multiple Access (CDMA) service, has stated that its new LTE service would help the firm achieve a double-digit growth target this year.
Smartfren president director Merza Fachys told the Post recently that revenues from data subscription would automatically rise when consumers experienced better and faster Internet speeds.
The CDMA operator aims to make its 4G/LTE service commercial in the second half of this year on the 850 MHz and 2.3 GHz frequency bands.
GSM player PT Hutchison 3 Indonesia, meanwhile, will launch its commercial 4G service on the 1,800-MHz frequency band around November.
Telkomsel, XL and Indosat launched their commercial 4G on 900 MHz late last year. The service, however, received a lukewarm response from customers as the Internet speed was considered similar to that of 3G.
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