By : Hazim Ahmadi
In this article I would like to share our experiences, best practices and what should operators do in order to have effective network in 3G/4G services. Indonesia is one of the biggest operators in term of number of subscriber in Asia, so I think it’s not bad to study what happened in there.
Mobile Landscape Industry
I think a tight competition on cellular industry is happening anywhere in the world. Since too many operators, Indonesia also faces this situation like price combat, subscribers churn, capacity issues and etc.
As you might know, today there are more than 10 wireless operators in our country. According to third quarter two thousand nine data from annual report of respective operators today’s subscriber number is about 180 million users out of two hundred and forty million population or about seventy five percent.
Actually the market almost saturated especially from voice services in urban sub urban areas. So operators are looking for revenue from other service that is data services.
The largest number of users as a whole user in Indonesia is Telkomsel, then the second Indosat and the third XL Axiata. Telkomsel’s market share is over 43% of total subscribers or around 80 million users. For CDMA systems, TelkomFlexi is the biggest of market share with 15 mill subs or around 9%, followed by Bakrie Telecom with 9 million subs or about 6%. The two last operators are not as full mobility but the limited mobility operators.
In Indonesia we have two kinds of technology that used in mobile operators those are CDMA and GSM. It the first time CDMA technology-based network was used as limited mobility license operator, but as government released regulation no.1/2010, the license is canceled and it is automatically changing become cellular license. Many industry analysts say that those operators will predictably merge for consolidation.
BTS population can be used to measure how well access network of operators planed. That’s why here I show you the BTS (including 2G and 3G) number belongs to operators. I only note the big five operators. The graphic of BTS trend clearly tell us that operator keep trying to increase its BTS number to meet increasing capacity demands. The number of BTS deployment drastically increase as subscriber growth.
In addition to enlarge coverage and increase capacity, operators have been deploying 3G BTS since several years ago. Unlike at the first time 3G service introduced to market, today there is a plenty of internet application widely accessible and drive increasing the needs of data access. The higher data rates in BTS require wider bandwidth in backhaul network.
It means that operators must provide what their subscribers want anywhere anytime. Because so many Internet application, now users want data access services. They have to expand the 3G services coverage with Node B/EV DO not only in urban area but also beyond the one.
Mobile Capital Expenditure
The total capital expenditures (CAPEX) investment at year 2010 becomes 2.6 billion USD from 2.95 billion USD at 2009. According to operators CEO at press release, the CAPEX mostly allocated in the network infrastructure deployment.
However, most operators in Indonesia targeting 15% compound annual growth rate in 2010. So no doubt they keep expanding their voice and data services in term of coverage and capacity. Operators realize the need of data access service is rising up. For example Telkomsel is commited to leverage broadband mobile lifestyle revenue portion from 5% to 20% of total revenue. All operators now face the same situation which is the way of communication has been changing. Service is transforming from SMS and voice only become information convergence like Internet, video and other products.
Revenue from Voice & Data
What I am going to say here is to tell you the graphic of operators’ revenue from year 2007 to 2009. Revenue growths actually rose for a whole operator.
However, in this year Telkomsel will focus on mobile broadband services to meet high data rate demands and high number of subscriber. The growth of mobile broadband users rose seven hundred percent become six point one million users at the end of two thousand nine from about nine hundred thousand users at the beginning of the year. The data traffic increase become 178%, the minute of usage in voice service also increased 203 % and SMS growth 20%. While the main revenue of Telkomsel remains from voice services and XL Axiata’s voice revenue seems to be overtook by revenue from data. It is interesting that data usage on Indosat network even increased two hundred percent become twenty million terabyte, with ARPU USD 4 per month.