Huge potential for cellular operators in Indonesia

T. Hidayat, Contributor, Jakarta

Among the businesses in the country, the telecommunications industry is enjoying some of the most rapid growth. It survived the economic crisis that hit the country in 1997. Its irrefutably enduring quality has made this strategic industry one of the businesses with the most potential in Indonesia.

Cellular telephones, for example, have reached sales figures of more than 11 million within a couple of years, far exceeding the number of fixed-line telephone subscribers, which stands at 7.5 million.

A number of observers and industry players are optimistic about further growth. One of the reasons behind this optimism is that cellular technology is offering an array of innovative developments, along with the enhanced features of the handsets themselves.

The robust growth of the cellular market has not only attracted operators or manufacturers, but content providers as well. With the ever increasing demand by consumers for various features and information, the business is wide open for content providers to make available the required services using sophisticated telecommunications technology.

One of the more successful content providers is In Touch. Together with Nokia, In Touch has developed a wide range of innovative features that meet the requirements of even the most demanding customer, such as specially designed and highly creative ringtones, picture messages, Multi Media Services (MMS), interactive news messages and reports on the Jakarta Stock Exchange.

"We provide various sorts of content, from business and sports to games," said Kendro Hendra, managing director of In Touch.

With all these features, Kendro said, apart from revenue based on voice telecommunications, cellular service providers are able to create larger and newer market segments, which comprise subscribers that prefer lifestyle-oriented services such as entertainment, games and so forth.

These new features have become real added values that not only prove significant advances have been made in cellular technology, but also provide huge profits for manufacturers. The general manager of Nokia Mobile Phone Indonesia, Hasan Aula, said: "A cellular phone can reflect the owner's individual personality. It is not merely a tool for communication, but it has become an integral part of lifestyle. This is one of the reasons why we have launched funky-plasa.com to educate our customers about the latest features on Nokia's mobile phones. On this website we also provide simulations to make it easy for them to understand how to use the features."

In today's highly competitive cellular phone market, things have not changed drastically, with Nokia still holding the top position. Hasan attributed the company's success to its well- integrated marketing strategy and the consistent launching of products that match consumers' needs. Regarding its service, Hasan said that Nokia constantly enhances the quality of services to ensure client satisfaction. "Our after-sales service, for example, is on the top of our priority list."

Nokia also provides customers with another convenient method for purchasing its products. It cooperates with several major banks in the country so that customers can buy Nokia cellular phones through a specially designed installment program with low interest rates.

Not only cellular phones with GSM technology are flourishing, as CDMA-based cellulars are also now enjoying growing popularity, with the latest service -- Telkom Flexi -- launched recently by PT Telkom and followed by another provider, Indosat. These types of cellulars using the rates of fixed-line telephones are considered a serious threat by most providers of GSM-based cellulars. The result is a price war that has seen subscription rates and rates for communicating via GSM cellulars fall.

The area of competition available for GSM providers is a wider range of services and features to pamper customers and maintain loyalty. "We will keep enhancing our services and features apart from those related to voice-communication, like Life In Hand, our feature that provides news, various information, horoscopes and even games," said Erik Tan Have, general manager of marketing and product management at Excelcom.

One telecommunications observer, Roy Suryo, however, was not too happy about current developments. He lamented the fact that only 5 percent of the country's population has any kind of access to telecommunications. "We are lagging behind the neighboring city-state Singapore, where close to 70 percent of this much smaller nation's people have phones," he said.

In spite of the low figure of telephone ownership or subscribers, many analysts and observers agree that the country holds huge potential for the telecommunications industry, including cellular phones. Both the government and industry players still have a lot to do to create growth and enlarge the market.

Like Hasan said: "Prospects are bright as telecommunications is already established as an essential part and need in our modern lives. Our role in the market is surely to benefit our current customers and would-be customers in the near future."