JP/17/Marketing Perspective

JP/17/Marketing Perspective

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."