What we Learned About the Indonesian Market

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Darren Gore
What we Learned About the Indonesian Market

I recently had the opportunity to join ten Telstra partners on an Indonesian study tour. The purpose of the trip was to unmask the Indonesian market, understand how it works and how Indonesia could become part of business in Australia.

 

Our Itinerary

The tour began on Monday 25th of March and concluded on Wednesday the 27th. Over three days we were introduced to TelkomTelstra, a joint venture between Telstra and Telkom Indonesia (Indonesia’s largest telecommunications provider), we met with the Australian Ambassador to Indonesia as well as the Austrade and the Business Council.

We were taken on a tour of Telkom Indonesia’s experience centre, where they showcased some of the latest and greatest technology, laid out in a theme park format. It was quite the experience!

I personally had the opportunity to experience some of the virtual reality technology they were showcasing. In this case I was walking through a haunted house with zombies coming at me left right and centre.

Following our tour of Telkom Indonesia, we were given a tour through BKPM, the Indonesian Government agency that grants businesses licenses to trade and operate across the country.

To conclude the event, we were taken through the old town of Jakarta on a tour through the main museum before beginning our travel back to Australia.

 

What did we learn?

Gary Quinlan, Australian Ambassador to Indonesia, made some interesting comments around how many Australians know Indonesia simply as Bali and that only 24% of Australians realised that Indonesia was actually a democracy just like us. Currently, only 350 Australian companies are set up and trading out of Indonesia, yet it is one of our closest neighbours outside of New Zealand.

Indonesia is classed as the world’s fourth largest country by population, however its GDP is $1.016 trillion which is $307Bn short of Australia’s $1.323 trillion GDP, making the per person figure $3,833, a lot lower than Australia at $53,780 per person.

Indonesia has slowly been increasing the general wealth of the population, however they still have a long way to go. Their growth rate currently sits at 5% per year which is a healthy figure, however it has been quoted as needing to grow to 7% for the country to truly lift the living standard of their citizens.

One advantage Indonesia has is that they have a young population, with the median age sitting in the mid 20s compared with Australia’s which sits in the mid 30s.

Below are some of the facts we learned about Indonesia.

 

Telecommunication in Indonesia

The Telecommunication Strategy in Indonesia has taken a different path than that of Australia and other countries. With Indonesia being made up of 18,307 islands, feeding fibre or copper cable to connect all of these under water has been cost prohibitive. This has led to a strategy of their telco industry focusing on, and spending much more money on, wireless communications than fixed connections.

Telkom Indonesia is the country’s largest carrier and it is state owned by the Indonesian Government, as are many of the main service and utility providers. There are 368 Million SIM services connected in Indonesia today and growing.

Like Australia and many other markets, Indonesia is talking a lot about IoT and connected devices at home and in other machines. Telkom Indonesia is looking to make a big play in this market.

Unlike Australia and other countries, the Indonesian mobile market is mainly pre-paid with over 80% of customers using a pre-paid service rather than receiving an account.

 

My Final Thoughts

In Conclusion, it was fantastic to experience the business side of Indonesia and see how its capital, Jakarta, functioned as a city, economy and business district. The Indonesian people are warm, friendly and very inviting and inclusive.

This is certainly a country that Australian businesses should keep an eye on, and perhaps consider as part of future growth strategies.