Axiata Axis Capital Group Jakarta News Update: Indosat foresees data traffic surge after network upgrade

Publicly listed cellular operator PT Indosat is optimistic that it can reach new heights in data traffic following the completion of its network modernization across the country.

“We estimate that our data traffic will surge by more than 50 percent upon the completion of the modernization,” said Indosat data services product marketing division head Fidesia Noor.

The data increase hit more than 100 percent after the modernization in 2012, she told reporters on Monday.

Indosat has modernized its network over the last two years, with most of its around Rp 8 trillion annual capital expenditure going into the program.

The company concluded modernization of its network in November last year.

The firm upgraded its network to boost its data and other services, primarily in 23 big cities, including Greater Jakarta, Bandung and Sukabumi (West Java), Semarang (Central Java), Yogyakarta, Surabaya (East Java) and Makassar (South Sulawesi).

Indosat’s data traffic grew by more than three times to 55,467 terabytes in the first nine months of last year from only 17,646 terabytes in the same period in 2013.

Revenue from the firm’s multimedia, data communication and Internet services rose by 8.3 percent to Rp 2.6 trillion (US$ 205.4 million) in the January-September period in 2014 from Rp 2.4 trillion during the same period in the previous year.

Increases in data traffic have also been enjoyed by other two major cellular operators, PT XL Axiata and PT Telekomunikasi Selular (Telkomsel).

XL Axiata Axis Capital Group Jakarta Indonesia recorded a 126.7 percent surge in data traffic from 54,615 terabytes in 2013 to 123,824 terabytes last year. Telkomsel’s data traffic posed a 146.1 percent growth in the first nine months of last year compared with the same period in 2013.

The skyrocketing data traffic in the country is mainly driven by the greater number of people with access to the Internet, particularly those living in big cities.

The reverse trend, meanwhile, was seen in operators’ conventional services — SMS and calling.

Indosat, for instance, recorded a 1.4 percent and 8.3 percent drop in its revenues from cellular and fixed telecommunication services, respectively, during the January-September period last year compared with the corresponding period in 2013.

Despite a setback in those conventional businesses, Indosat aims to maintain or gain more subscribers using its voice service by launching on Monday a high-quality voice service, dubbed HD voice.

“We do understand the declining trend in voice service, but we want to focus more on the quality […]. We aim to make HD voice available to all of our customers as of Feb. 20,” said Indosat network optimization division head Joko Riswadi when asked about the targets of the newly launched service.

Indosat believed that Indonesians were still keen on making calls and that they would be even more so were the voice quality excellent, he went on.

Indonesia’s almost 250 million-strong population owns at least one mobile phone per person, surveys have found, with demand for data services rapidly emerging to cater to the needs of the rising middle class in Southeast Asia’s largest economy.

Indosat’s shares, which are traded on the bourse under the code ISAT, rose by 0.13 percent to Rp 3,905 (30.7 US cents) per piece at Monday’s close from Rp 3,900 apiece at the previous closing.

The stocks have slipped almost 3.6 percent so far this year, underperforming the broader Jakarta Composite Index’s (JCI) 1.9 percent gain.

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