BMI has expanded its fixed-line and broadband sections, as promised in our previous report, followingfurther additions to the mobile section on mobile content. Of note this quarter has been the growingsupply and demand of broadband services, which has been accelerated further in the wake of theeconomic recession commencing in late 2008.
The deployment of broadband services is seen by many in the region to provide economic stimulus, withregard to foreign investment and also the creation of additional employment opportunities. In the firstquarter of 2009 alone, Indonesia saw the deployment of two submarine cable projects at a combined costof US$300mn, as well as Biznet Networks announcing a tie-up with Indosat in extending their FTTHnetworks to offer total coverage to Jakarta.
Many of these developments, however, centre on major urban areas, and there is concern that the dividebetween urban and rural areas could be exaggerated further. Efforts at closing the gap would appear fornow to be on the backburner. Earlier announcements that a WiMAX auction would take place have gonequiet, as coverage of rural areas appears to be less of a concern. Operators will spend much of theirlimited capital on developing networks in areas likely to bring about a stronger return on investment, andrural areas are the least likely to bring about this result.
Mobile broadband is equally witnessing strong demand, with Mobile-8 and Smart Telecom the latesttwo to offer the service as they look to rival that of Telkomsel, Indosat and Excelcomindo. LaunchingCDMA2000 1x EV-DO networks, as opposed to W-CDMA, Mobile-8 announced the introduction of its‘Mobi’ high-speed mobile broadband service, with Smart Telecom offering ‘Jump’, both with theoreticaldata speeds of 3.1Mbps (download) and 1.8Mbps (upload). For 1GB the Mobi service charges IDR499(US$41) per month, while Smart Telecom offers 6GB with a prepaid package charging IDR789.
We have left our forecasts for broadband untouched, with latest full year data remaining for 2007. At theend of 2008, BMI estimates there were 1.5mn subscribers, accounting for 0.6% of the population, andthat by 2013, this figure will have risen to just under 4%.
Similarly, our forecasts for mobile remain unchanged, with FY08 data available only from Indosat,Excelcomindo, Bakrie Telecom and Hutchison Telecom. Based on these figures, and those of historicaldata, we retain our estimate that there were 152.4mn subscribers at the end of last year, and that by 2013,this figure will have reached 426.9mn.
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