Telecom and pay TV revenue in Indonesia to show 4.5% CAGR

Telecom and pay-TV services revenue in Indonesia to increase at 4.5% CAGR over 2023-2028, forecasts GlobalData

The growing adoption of 4G/5G services and steady growth in fiber broadband subscriptions will drive the total telecom and pay-TV services revenue in Indonesia at a compound annual growth rate (CAGR) of 4.5% from $15.1 billion in 2023 to $18.8 billion in 2028, forecasts GlobalData, a leading data and analytics company.

GlobalData’s Indonesia Telecom Operators Country Intelligence Report states that the mobile voice service revenue will decline over the forecast period, due to the bundling of free voice minutes with mobile service plans, increasing use of OTT-based communication apps for voice calling, and the subsequent decline in mobile voice average revenue per user (ARPU) levels.

Mobile data service revenue, on the other hand, will continue to increase driven by the continued rise in mobile internet subscriptions, aggregate growth in 4G subscriptions, and more importantly growing adoption of higher ARPU-yielding 5G services over the forecast period.

Sarwat Zeeshan, Telecom Analyst at GlobalData, says: “4G will remain the leading mobile technology in Indonesia over the forecast period, by subscription share, benefiting from the Ministry of Communications and Informatics’ (MCI) push for 3G shutdown and MNOs continued 4G/LTE network expansion. For instance, as of July 2024, Telkomsel expanded its 4G network coverage to 97% of the country’s population after decommissioning its 3G network and upgrading it to 4G/LTE technology in June 2023.

“With the ongoing 5G network upgrades and plans for more widespread 5G network rollouts by the operators, 5G services will go on to account for more than 20.8% of total mobile subscriptions in the country by 2028.”

In the fixed communication services segment, fixed voice revenue will continue to decline as customers switch to mobile and internet-based voice communication services. Fixed broadband services revenue, on the other hand, will grow at a CAGR of 6.9% over the 2023-2028 period, supported by the continued subscription gains in fiber broadband services, on the back of ongoing fiber network coverage expansion.

Zeeshan adds: “The growing demand for high-speed broadband connectivity and ongoing fiber-optic infrastructure expansions in the country will support the growth in fiber broadband subscriptions over the forecast period. For instance, Fiberstar, an Indonesian telecom infrastructure company, extended its fiber-optic networks to achieve 1.9 million homepasses spread across 135 cities and 17 provinces, as of December 2023, and aims to bring this total to 2.8 million homepasses by the end of 2024.

Pay-TV service segment will see a decline in revenue over the forecast period, due to the continued drop in cable TV subscriptions and decline in total pay-TV service ARPU.

Zeeshan concludes: “Telkomsel topped mobile and fixed communication market segments, by subscriptions in 2023. Its ongoing 4G network expansion and 5G network rollout will help to maintain its leadership in the mobile services segment. The telco has launched 5G services in over 49 cities in 2023. The operator is stepping up investment to expand 5G network in the country. Its leadership in the fixed broadband segment is primarily due to its strong presence in the fiber broadband segment. The telco has invested heavily in fiber-optic network and last mile connectivity, to provide high-speed broadband services.”