The Struggle of New Entries in Cellular Business in Indonesia(1)
As written long time ago in several postings, Indonesia currently has 11 cellular operators, 5 of them using GSM and 3G technology and the rest (6) using CDMA technology. Only 3 out of 11 operators are considered in a good business condition. All of them are GSM and 3G operators, namely Telkomsel with almost 60m subscribers, Indosat with almost 40m subsribers and Excelcomindo Pratama (XL) with almost 30m subscribers.
There are several disadvantages of new entries in cellular business in Indonesia compared to the incumbent (the big threes). Firstly is the tariff. When the the incumbent started their cellular business in 1990s (Indosat GSM launched in 1995, Telkomsel in May 26,1995, XL in Oct 1989), all of them have received:
- Highest tariff just for voice call. No price war, and the tariff was far higher than fixed line tariff.
- At that time, all subscribers are post paid. Each subscribers have to pay subscription fee every month. The subscription fees was about $30 (or Rp 65,000 where US$1 was about two thousand rupiah).
So, the incumbents have received quite a lot of money on his earlier time, far higher than the new comer in this telecommunication business at this time. Bear in mind that all operators were with limited coverage at that time, but the subscribers have to pay with high tariff.
The new comers are (sort on date of launching):
Telkom Flexi, launched on December 2002 (CDMA Technology, 800 MHz).
Bakrie Telecom (Esia) launched on September 2003 (CDMA Technology, 800MHz),
Mobile-8 established in Dec 2002, and launched December 2003 (CDMA Technology, 800MHz).
Sampoerna Telekom launched on April 2004 (previously known as Mandara Selular Indonesia, CDMA Technology, 450MHz).
Indosat StarOne launched on July 2004 (CDMA Technology 800MHz).
HCPT or Three launched on 2007 (GSM and UMTS Technolog, 1900 & 2100 MHz) .
Smart Telecom launched on Sept 2007 (CDMA Technolog, 1900 MHz).
Axis launched on April 2008 (GSM and UMTS Technolog, 1900 & 2100 MHz).
(to be continued)
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