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Indonesia Emerging as New Battlefield for ICT Companies
Indonesian Market
Indonesia Emerging as New Battlefield for ICT Companies
  • By Michael Herh
  • November 23, 2015, 03:00
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Korean mobile companies are making inroads into the Indonesian market. The Korean mobile industry anticipates that Indonesia will rise as a new mobile market, since the nation has the world’s fourth-largest population and its many islands gave rise to the creation of a mobile service-friendly culture.

According to the Ministry of Science, ICT and Future Planning on Nov. 19, the number of mobile service subscribers stood at 303.69 million as of the end of 2013. This figure was up 7.3 percent from a year before. Its penetration rate was staying at 121.5 percent. The Asian Mobile Consumer Report says that about 15 percent of all of Indonesia’s mobile service users were using two or more cell phones as of September 2013.

The report added that 24 percent of them were using smartphones, so the penetration rate of smartphones is expected to rise. Two Korean Internet business leaders – Naver and Kakao – began to preempt the Indonesian mobile platform while focusing on messenger services, since Indonesia has a mobile market with great growth potential. In particular, the nation is planning to transform its 2G mobile telecommunication infrastructure into 4G long-term revolution (LTE) before hosting the Asian Games in 2018.

At the moment, the 2G service accounts for 75 percent of the mobile service infrastructure in Indonesia. With the opening of a big mobile market momentum, Korean mobile messengers have begun to enter the market ahead of other foreign companies.

Naver is ranked second in the Indonesian messenger market after its global messenger Line took the Indonesian market in 2012. The number of monthly average users of Line grew to 26 million in the first quarter of this year, from eight million in the first quarter of last year.

Kakao is spurring its expansion into the Indonesian market by taking over assets of Indonesian SNS Path and Path Talk for 22 billion won (US$19 million). Path is the third-largest SNS after Facebook and Instagram in Indonesia. Its monthly average users add up to ten million. Three years ago, Kakao Talk made a foray into Indonesia and has inked 18 million downloads. The company is aiming at taking Indonesia as a springboard to the global market by expanding synergies with Path.

Pantech is planning all-around strategies to invade the Indonesian mobile market such as smartphones, communication equipment and the Internet of Things. The company already announced its plan to take Indonesia as a toehold for its revival when it exchanged hands. First of all, Pantech is planning to export a total of 300,000 units of mid- to low-priced smartphones to Indonesia within the second half of next year. It is said that the company will produce the products in the OEM system at factories in Southeast Asian countries for price competitiveness.