Jakarta, February 15, 2012 – Frost & Sullivan expects Indonesia's broadband penetration rate to reach 60% in 2016 driven mainly by "small-screen" mobile, decreasing price of handsets, social media boom, and online commerce.

Iwan Rachmat, Senior Consultant, ICT Practice said that internet penetration may grow at 29.7% CAGR in 2010 – 2015 and data connections to grow at 21.9% in 2011 – 2016. "This is mainly fueled by s booming inn social media and trending up of "everything online" in the internet space" Iwan explained.

In 2011, Indonesia experienced an era where "voice" market had been maturing and mobile internet was further introduced to the market. This was marked by a high wireless telecom penetration, reaching an estimated 160% SIM penetration and an estimated 63% unique subscribers penetration in 2011.

As the overall industry is maturing, the total revenue is projected to grow in the range of 4% – 6% average per year in the next 5 years. An increasing need for CAPEX in line with an increased demand for data services, data revenue monetization which is still in a "learning curve" stage, and operator anticipation for LTE network deployment are the key factors impacting investment revenue growth.

Meanwhile voice revenue growth is slowing down and as such operators need to introduce new sources of revenue growth where data centric services are the next natural development of market needs.

The increasing buzz around online commerce is expected to drive its growth by 67% CAGR between 2010-2015. Jayesh Easwaramony, Vice President, ICT Practice, Frost & Sullivan Asia Pacific, points out that Indonesia could potentially reach 10 times its current m-commerce revenue by 2015 with a proper ecosystem and infrastructure, technology, and regulatory framework in place.

"Although Indonesia's online market revenue is very small, the potential for growth is there," said Jayesh.
In 2015, the e-commerce business may reach U$D 1.8 billion contributed by e-commerce, ecosystem enablers, and digital content.

Meanwhile on the enterprise side, Eugene van de Weerd, Country Director of Frost & Sullivan Indonesia, said that there is a huge market potential for enterprise services with an estimated value of U$D 3 billion by 2015, driven by expansion of contact center services, a huge interest in data center investments by domestic and international players, and the continuously growth of system integration.

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Dewi Nuraini
Corporate Communications – Indonesia
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Email : dewi.nuraini@frost.com