Operators warned to step up in Indonesia - Mobile World Live

Operators warned to step up in Indonesia

20 JAN 2016

Indonesia’s telecoms minister reportedly threatened to revoke “some” mobile licences in the country unless operators merge or step up their efforts in building out high-speed networks.

According to Bloomberg, minister Rudiantara (who goes by one name like many Indonesians) also said he wants the country to operate with a maximum of four operators by the time his term ends in 2019, adding that smaller players should either merge or exit the market.

“Each permit has requirements for the operator to invest and to build, so if they don’t build anything, I can revoke their permit,” said Rudiantara, who held roles at two of the country’s largest operators before joining the government.

“My background is in the private sector, so I’m pragmatic. I will suggest they consolidate to have the capability to invest and retain their permits.”

The country’s market is indeed heavily crowded, operating with seven players according to GSMA Intelligence.

Telkomsel leads the market by a long way with an estimated 153.3 million connections, ahead of Indosat with more than 69 million, 3 Hutchison (51.2 million) and XL Axiata (40.8 million) (all figures end-Q4 2015). Smaller players are Smartfren with 12.5 million connections, Bolt with 2.4 million, and Ceria (68,688).

Rudiantara’s comments reflect a level of frustration in government at the lack of efficiency in the country, with mobile coverage still patchy in many parts, despite having more than 300 million mobile connections.

Last year, the country’s top five operators said they were launching 4G services on 1.8 GHz networks in selected cities and regions, and were reportedly gearing up to heavily invest in their 4G offerings. 

Although he did not name any companies, the minister said some operators were not fulfilling agreements to develop infrastructure, and the government had fined some of the culprits already.

“So far we’ve handed them fines and penalties, but my job isn’t to accumulate funds for the government,” he said. “I only need to enforce the permits and I’m prepared to do that, but I’d rather take a friendly approach and suggest they merge to keep operating.”

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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