The ever-evolving world of consumer digital technology will continue delighting people next year. The past has seen smartphones becoming better and more affordable, a trend unlikely to stop. But beyond just smartphones, 2015 will see the take-off of several new trends as well, which will shape the future of telecommunications in Indonesia.
LTE (4G) networks
“The primary trend would definitely be LTE [Long-Term Evolution],” XL Axiata spokesperson, Turina Farouk, said.
Mobile operator XL Axiata, as with Telkomsel and Indosat, recently launched commercial LTE networks following approval from the Communication and Information Ministry. LTE networks promise better and faster data experiences when compared to their antecedent, 3G.
However, Turina pointed out that LTE networks would be available only in select places given that its rollout was still in the initial stages.
“Users of the technology will mainly be the early adopters, and its narrow use is chiefly due to the limited number of 4G-enabled devices in the market,” she said.
She added that to push LTE adoption, the operator has given away free LTE-enabled SIM cards and bundled SIM cards with LTE-ready smartphones with mid-range prices, the most affordable standing close to Rp 2.8 million [US$221.43].
Needless to say, Indonesians have already become well-versed in using a slew of mobile messaging applications, from BlackBerry Messenger to WhatsApp. But now, with smartphones boasting better specs and can tap enhanced networks, users will move to the next thing, Voice Over Internet Protocol (VoIP).
“The usage of mobile in manner we have never seen is the most exciting part of Indonesia’s future. People will go beyond messaging,” Rohit Dadwal, the Mobile Marketing Association’s (MMA) managing director for Asian and the Pacific, said.
Mahajan of Roland Berger Strategy Consultants added that people would start using VoIP applications, as the technology, on capable smartphones and networks, promised an “improved experience” than normal voice calls.
“Even WhatsApp is going to have a voice chat feature soon. That will change the way people interact,” he said.
It has been reported that WhatsApp, a mobile messaging platform acquired by Facebook, would include voice-calling services that leverage on the app’s messaging functions.
Video, video everywhere
Wong Tjin Tak, communication, media, and technology lead at Accenture Indonesia, pointed out that Indonesians loved “snack-able content” — the reason why social media and gaming apps were hugely popular in the country.
“This is a tremendous opportunity for businesses to leverage,” he said.
Dian Siswarini, deputy CEO of XL Axiata, pointed out that indeed, 2015 is the year of data and digital for their business.
“We have to go digital, but digital services is a hugely different form of business compared to traditional telecommunications,” she said.
She added that video content, alongside e-commerce and mobile payment tools, was one of the three verticals the mobile operator had interest in.
“We are weighing possibilities such as should we just be a pipe or act as a broker for video content. Or else, we can take it further by creating a production house for video content,” she said.
Tore Berg, managing director for communications, media and technology, and consumer relations, reminded that networks have to be readied for this bandwidth hungry content, such as Snapchat video chats.
“If a network is not ready, no one will use such content. Once ready, and with more Wi-Fi available, such apps will take off,” he noted.
Xiaomi and e-commerce
Expect Xiaomi, the Chinese smartphone brand which has been making waves, and those similar to them to keep churning the market.
Nithin Mahajan, principal at Roland Berger Strategy Consultant, pointed out that Xiaomi has been disruptive to the smartphone market, pointedly the lower-end, by selling their products at considerably lower price points than competing devices, based on similar features.
“The smartphone market at the lower end is increasingly becoming commoditized, and this opens up new options for Indonesians,” he said.
He added that the company and those in the same vein were well funded and hence were not one-hit wonders.
Bloomberg recently reported that Xiaomi was in discussion of for another funding round that might value the company between US$40 billion and $50 billion.
“And they [Xiaomi] sell their products primarily through online sales, which has opened up a completely different market,” Mahajan noted.
Hugo Barra, Xiaomi’s global vice-president, said that they had a “good start” in Indonesia, given that they were able to sell over 100,000 units a majority of which were Redmi 1S, within two-and-a-half months.
“Indonesia will, for sure, be the largest market in the near future,” he said during a trip to Jakarta towards the end of the previous year.
Yet, he pointed out that “our toughest challenge is e-commerce, which is still very nascent”.
“But we see this as an opportunity to become a driving force to develop that [e-commerce] market,” he noted.
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