This report provides a comprehensive overview of the trends and developments in telecommunications, broadcasting and pay TV markets in Indonesia and Timor Leste. Subjects covered include:

Key Statistics
Market and Industry Overviews
Regulatory Environment
Major Players (fixed and mobile)
Infrastructure
Mobile Voice and Data Markets
Internet, VoIP, IPTV
Broadband (FttH, DSL, cable TV, wireless)
Convergence and Digital Media

Indonesia, a country of more than 220 million people, continues to see its telecom sector grow in a busy manner despite the occasional setback. The country has some particularly big challenges to confront in building the necessary telecommunications infrastructure to cover its uniquely complex geography. It must also deal with a range of social, political and economic issues. Having rebounded reasonably well from the Asian economic crisis of the late 1990s, the government has been gradually reshaping the telecom industry. The country is now seeing healthier growth in both subscriber numbers and in revenues. Whilst Indonesia’s fixed-line teledensity has remained disconcertingly low (less than 6% in early), a move by incumbent Telkom to rapidly roll out Wireless Local Loop (WLL) services to provide for unserved communities is looking promising and should boost teledensity.

The country’s mobile market has continued to expand and by early 2006 the mobile sector was growing at around 60%; the subscriber base had passed 45 million (penetration 19%), up from 3.6 million subscribers just five years earlier. Whilst mobile penetration has quickly raced past 10%, there is enormous potential remaining for further growth in this market. The government has already chosen a company, Cyber Access Communications, to provide the country with its first 3G network. There is certain to be considerable interest in this project.

In a reminder of the events of the late 1990s, the rupiah slid to a more than four-year low against the US dollar in August 2005. This sort of event can be a problem for the operators, the bulk of whose revenue is in rupiah, while investment costs are mostly in US dollars. A weaker rupiah could see operators suffering foreign exchange losses, depending on their gearing arrangements. The country has continued to struggle to attract foreign investment in recent years, with potential investors expressing concerns over the twin issues of corruption and government red tape. This naturally has had an impact on the telecom sector, which desperately needs foreign investment to help build infrastructure. Foreign direct investment into Indonesia fell 26% year on year in 2004 to US$10.3 billion. Ironically, the weakening rupiah in 2005, together with evidence of a more stable government, increased the country’s investment prospects and actually saw foreign investment jump 74% in the first half of the year.

The tiny fledgling nation of Timor Leste(East Timor) experienced further political instability and outbreaks of violence in the first half of 2006. To the observer, the country had appeared to have got off to a solid start in rebuilding its entire infrastructure following the turbulence that ensued after the referendum of 1999. However, it remains difficult to assess the long term impact of the events of 2006 on such things as infrastructure building. Following the 1999 crisis, the United Nations Transitional Administration in East Timor (UNTAET) provided overall administrative and financial assistance during the period up until elections were held in April 2002. The United Nations finally completed its role in early 2005. The new government was looking to gain ongoing assistance from the international community in putting strong systems in place. Telecommunications remains an important priority under a newly established Ministry of Transport, Communication & Public Works. In July 2002, the East Timor government selected Portugal Telecom to be the lead partner in a consortium to operate Timor Telecom. The new operator replaced Telstra in March 2003 and set about expanding the countries telecom facilities.

It is noted that East Timor (also known as Timor Leste) is yet to be listed as a member of the International Telecommunication Union (ITU). This makes it difficult to obtain official statistics on the country’s telecom sector. Where official Statistics are not available, BuddeComm will normally provide an estimate.

1. INDONESIA
1.1 Key statistics
1.2 Telecommunications market
1.2.1 Overview of Indonesia’s telecom market
1.3 Forecasts
1.3.1 Overview
1.3.2 Scenario forecasts
1.4 Regulatory environment
1.4.1 Telecommunications Law 2000
1.4.2 Telecommunications Law 1989
1.4.3 Tariffs
1.4.4 Privatisation process
1.5 Fixed network operators
1.5.1 PT Telkom Indonesia
1.5.2 PT Indonesian Satellite Corporation (Indosat)
1.5.3 PT Satelit Palapa Indonesia (SATELINDO)
1.5.4 PT Bakrie Telecom (formerly Ratelindo)
1.6 Telecommunications infrastructure
1.6.1 National infrastructure
1.6.2 International infrastructure
1.7 Data market
1.7.1 Overview
1.7.2 ISDN and IN services
1.8 Internet market
1.8.1 Overview
1.8.2 ISP market
1.9 Broadband networks and services
1.9.1 Overview
1.9.2 TelkomNet
1.9.3 Internet via satellite
1.9.4 Wireless broadband
1.10 Content and e-services
1.10.1 E-commerce
1.11 Broadcasting market
1.11.1 Overview
1.11.2 Analysis – Changes to broadcasting laws – February 2006
1.11.3 Regulatory environment
1.11.4 Free-to-air (FTA) TV
1.11.5 Cable and pay TV
1.11.6 Major players
1.11.7 Satellite TV
1.12 Mobile communications
1.12.1 Overview of Indonesia’s mobile market
1.12.2 Mobile technologies
1.12.3 Major mobile operators
1.12.4 Mobile voice services
2. TIMOR LESTE (EAST TIMOR)
2.1 Key statistics
2.2 Telecommunications market
2.2.1 Overview of Timor Leste’s telecom market
2.3 Regulatory environment
2.3.1 United Nations Transitional Administration in East Timor
2.3.2 National telecommunications policy
2.3.3 Autoridade Reguladora das Comunicaçóes (ARCOM)
2.4 Fixed network operators in Timor Leste
2.4.1 Telstra
2.4.2 Timor Telecom
2.5 Fixed network voice services
2.5.1 International calls
2.6 Data and Internet market
2.7 Mobile communications
2.7.1 Overview of Timor Leste’s mobile market
2.8 Broadcasting market
2.8.1 Overview
3. GLOSSARY OF ABBREVIATIONS


Exhibit 1 – Original consortia operating in each geographical zone
Exhibit 2 – Indonesian satellites – 2004
Exhibit 3 – Major FTA television broadcasters




Table 1 – Country statistics Indonesia – 2005
Table 2 – Telephone network statistics – 2005
Table 3 – Internet provider statistics – 2005
Table 4 – Internet user statistics – 2005
Table 5 – Broadband statistics – 2005
Table 6 – Mobile statistics – March 2006
Table 7 – National telecommunications authorities
Table 8 – Fixed line growth and penetration – 2005; 2010; 2015 – Lower forecast
Table 9 – Fixed line growth and penetration – 2005; 2010; 2015 – Upper forecast
Table 10 – Mobile growth and penetration – 2005; 2010; 2015 – Lower forecast
Table 11 – Mobile growth and penetration – 2005; 2010; 2015 – Upper forecast
Table 12 – Internet subscriber growth and penetration – 2005; 2010; 2015 – Lower forecast
Table 13 – Internet subscriber growth and penetration – 2005; 2010; 2015 – Upper forecast
Table 14 – National network statistics and annual growth – 2004 - 2005
Table 15 – Fixed lines in service and teledensity – 1995 - 2006
Table 16 – Fixed mobile (WLL) services subscribers – December 2005
Table 17 – Internet users and Internet subscribers – 1998 - 2005
Table 18 – Internet host computers – 1996; 1998 - 2005
Table 19 – Registered domain names – January 2005
Table 20 – Broadband subscribers and households - 2005
Table 21 – DSL subscriber growth – 2001 - 2005
Table 22 – Key broadcasting statistics - 2005
Table 23 – Broadcasting sector growth TV households and home satellites – 1997 - 2005
Table 24 – Pay TV subscribers by platform – 2001 - 2005
Table 25 – Mobile subscribers – 1995 - 2006
Table 26 – Mobile subscribers by operator and yearly growth – March 2006
Table 27 – Mobile market subscribers and market share by operator – March 2006
Table 28 – Telkomsel subscribers postpaid, prepaid and market share – 1999 - 2006
Table 29 – Telkomsel postpaid, prepaid ARPU, subscribers and annual change – March 2006
Table 30 – Telkomsel postpaid and prepaid subscriber growth – 2001 - 2006
Table 31 – Prepaid subscribers – selected operators – December 2005
Table 32 – Telkomsel SMS services and annual growth – September 2005
Table 33 – Country statistics Timor Leste – 2006
Table 34 – Telephone network statistics – 2005
Table 35 – Internet provider statistics – 2005
Table 36 – Internet user statistics – 2005
Table 37 – Mobile statistics – March 2006
Table 38 – National telecommunications authorities
Table 39 – Fixed lines in service – 1995; 1998 - 2000; 2003 - 2005
Table 40 – Mobile subscribers – 1999 - 2006