What 4G revenue, Indonesia’s telcos ask

By Ervina Anggraini May 19, 2016

4G subscribers to have reached 20mil by Q1 2016
Service adoption still slow, but device penetration is great

SINCE launching their commercial 4G LTE (Fourth Generation/ Long-Term Evolution) services, Indonesia’s operators Telkomsel, Indosat Ooredoo, XL Axiata, Smartfren and Hutchison Tri say they have not seen much revenue from the service.

This, despite the fact that as at the end of the first quarter (Q1) of 2016, Indonesia had 20 million 4G subscribers.

“The target is for 4G to be used by all Indonesians,” Communications and Information Technology Minister Rudiantara said at the LTE Conference 2016 in Jakarta on May 18.

“Although the penetration rate of 4G devices has increased, people are still using old SIM cards which can only accommodate 2G and 3G technology.

“To experience 4G, you need a specific SIM card,” he added.

Although 4G service adoption has been slow, it is still faster than the adoption of 3G services when they were first rolled out, according to XL Axiata chief executive officer Dian Siswarini.

“While there are devices below US$100 readily available, the problem is that about 40-50% of our subscribers still have not switched to the new SIM card,” she said.

Migrating networks is easy compared with migrating users, argued Smartfren president director Merza Fachys.

Smartfren has been moving its older Code Division Multiple Access network to 4G technology.

“Our 4G service already covers 85 cities and reaches two million users. We are committed to migrating away from CDMA by December,” Merza said on the sidelines of the LTE Conference.

Hutchison Tri Indonesia vice president director Dany Buldansyah said telcos need to change user’s mindset by focusing on giving the best services and customer experience.

“We already know that 4G is a better technology that offers greater cost-efficiency to operators, and cheaper but faster speeds to customers,” he said.

“But customers are not using 4G even if their devices support it,” he added, noting that this is true despite the fact that its 4G services are priced the same as its 3G services.

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