Growing household demand in Indonesia for high-speed Internet has fired up competition between some of the country’s largest telecommunications and media companies.
When First Media, Lippo Group’s media arm, was reported to be mulling the sale of its stake in broadband Internet provider Link Net, bidders were soon queuing at the door. They included Global Mediacom, the media conglomerate owned by Hary Tanoesoedibjo, and major operators Indosat and XL Axiata.
“We not only want to develop pay TV, but pay TV with Internet,” Tanoesoedibjo told reporters.
Even so, the Link Net sale remains on hold. “Internet broadband is still a strategic business for us,” First Media’s Vice President Irwan Djaja recently told the Nikkei Asian Review. “But we are always looking at all kinds of options.”
Global Mediacom and Indosat have since launched aggressive marketing campaigns for their own fiber optic services. Global Mediacom is a holding company for the operators of three national TV networks and the country’s largest pay TV service. With celebrities, filmmakers and social media gurus enrolled for promotions, it provides seven megabits per second of data for about 350,000 rupiah ($28) per month, and also offers bundled services for pay TV and fixed line telephones.
Launched in mid-2014, MNC Kabel Mediacom is Global Mediacom’s fiber optic service provider. It operates in six cities already and plans to expand to six more this year. “Our goal is to become the number one provider in all of the cities,” said Ade Tjendra, MNC Kabel’s commercial director. It has targeted 200,000 subscribers by year’s end, five times more than it had in September.
Indosat’s specialty is high speed Internet for residents of high rises. The company recently partnered with U.S. tech giant Google to give its fiber optic subscribers a free Google Chromecast device that facilitates streaming of online videos on TVs by syncing them to mobile devices.
“We are changing the way people use their personal devices,” Alexander Rusli, Indosat’s chief executive recently told reporters. He said the devices are shared among family members when at home.
Indosat launched its fiber optic service in late 2015, and can provide up to one gigabit per second in some parts of Jakarta. According to a spokeswoman, the company had acquired some 70,000 subscribers in five major cities by December, and plans to extend its reach to over 20 cities by year’s end.
The new entrants are up against Telekomunikasi Indonesia (Telkom), the state-owned telecommunications company with 80% of the broadband Internet market. Telkom has itself been expanding aggressively after rebranding from Speedy to IndiHome at the start of 2015, and shifting to selling Internet and pay TV as a package. Telkom aims to boost users from 1.1 million in December to 4 million by the end of the year.
[“Source-nikkei”]
