XL Axiata Axis Capital

Group Review

DRAMATIC CHANGE IN INDONESIA’S ACCESS TECH

Jakarta - XL Axiata, a subsidiary of Axis Capital Group and one of the biggest telecommunications network in Indonesia has been in the rocks in 2014, forcing the company to sell some of its towers to PT Solusi Tunas to pay off debts..

However, despite the battle for survival and the constant challenges which are constantly thrown in this industry, XL managed to remain one of the top three largest networks in the archipelago providing different telecommunications services across islands.

One of the major factors that help the company retain its stand is the increasing demand of access technology in the region and the rapid use of different promotions and telcomm services.

The past six years has seen a rapid

change in the types of technologies

used by Indonesians to access the

internet.

Like many developing countries in Asia, broadband internet connections were once very expensive that users gained access via internet cafes. That was until 2009 when broadband price war was started between mobile operators. There was also a successful deployment of enhanced 2G technology as well as the build-out of 3G in the more lucrative cities.

Until 2009, broadband internet connections were very expensive relative to average salaries, so the majority of internet users gained access via internet cafes. In 2011, monthly internet access fee had dropped to more than 50%. Reviews show that between 2009 and 2012, internet access tripled and Warnet, those provided by internet cafes fell by half.

WARNET

There are currently around 300 ISPs in Indonesia, 35 of which own network infrastructure, with the rest simply reselling capacity. The mobile operators are the largest ISPs by far, because the majority of users in Indonesia access the internet via a mobile device. Seldom can you now hear complaints on the slow connection or lack of internet access in major cities in the archipelago.

Telkomsel and Indosat are the largest ISPs, and are able to offer both mobile and fixed internet access through their group companies. XL is the third largest ISP. The other mobile operators (3, Axis, SmartFren, Esia and Ceria) are significantly smaller, since the Big 3 holds an 80% share of the mobile market.

Line speeds are similar between all three operators, with connection speeds generally peaking at around 3Mbps…on a good day and in a good location. And despite claims by the providers of much higher broadband speeds, most times in Indonesia you are happy if you can get a steady 512 kbps, especially if you’re in a high-density area such as Jakarta’s Golden Triangle.