Social "Medianesia" - Indonesia

Photo: Achmad Ibrahim/AP

TELECOMS | INDONESIA

42 | Focus Asean 2015/01

Social ‘medianesia’ Only a quarter of Indonesia’s population have personal internet access, but the nation is already a world socialmedia leader, signalling strong growth ahead

By Nithin Coca

Jakarta

Meeting of minds: Indonesian president Joko Widodo with Facebook CEO Mark Zuckerberg

is poised on the cutting edge of mobile technology. In fact, in some quarters, Indonesia’s capital is called the social media capital of the world, with its giant malls heaving with mobile phones and accessories, innumerable street vendors selling prepaid SIM cards and smartphone-toting hordes.

Just to take one oft-quoted example, no city in the world tweets more than Jakarta, where Samsung Galaxies, iPhones, Blackberries, and internet-enabled feature phones are ubiquitous. It is not uncommon to see riders on the city’s Transjakarta bus system holding a phone in one hand and another connected to a remote charger in their lap.

With over 270 million mobile subscribers, Indonesia is the world’s thirdlargest mobile market, according to a recent report by Ericsson. If that comes as a surprise, industry insiders anticipate further room for growth, especially as smartphone adoption increases.

Indonesia, in short, is poised to be at the forefront of mobile innovation for years to come.

The rise of social media in Indonesia g

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TELECOMS | INDONESIA

Just connect: Indonesia is Facebook’s thirdbiggest market, Whatsapp’s second and Path’s first

44 | Focus Asean 2015/01

comes with some unique twists. The archipelago nation of 250 million is Facebook’s third-biggest market, WhatsApp’s second and Path’s No 1. All have offices in the capital and see Indonesia as a major growth market, but they are using some unusual strategies to stay on top.

Prepaid SIM cards make up an estimated 98% of Indonesia’s market, according to industry advisory Redwing, and the SIMs often come bundled with three to six months of free access to unlimited data – but only through a particular app. WeChat, Twitter, and Line have all made deals with mobile providers to get users hooked, hoping that consumers will continue to use the app long after the free period is finished. Other marketing tools include paying influencers to tweet or share their content or apps, quizzes, games, and old-fashioned inperson promotional events countrywide.

According to Muhammad Fikri (@defickry), a blogger and youth activist with over 10,000 followers on Twitter, Indonesians are naturally open to social media technology.

“It relates to our nature as Indonesians,” he says. “Culturally, we are raised to socialise and make many friends, and social media is basically just a new tool that facilitates [doing that].”

If true, it is an insight that may explain why Indonesians are often among the first adopters of new apps, making it an intriguing market for the next generation of social media.

As recently as three years ago, the most dominant smartphone player was BlackBerry. For years, the BlackBerry Messenger service (BBM) was a must-have for business and personal users alike. Since then, a wave of Android handsets from Malaysia and China has diversified the market.

Greater access to the larger Google Play catalogue means more apps are available for a ready public. High-end growth is also significant, and even Apple products – which are beyond the price range of most Indonesians – have gained a foothold among well-off urban Indonesians.

Meanwhile, smartphones and tablets play a role in social interactions – and in a unique way.

“Being seen with a larger device is a way to mark your wealth and status,” says Gareth Bakrin, a media anthropologist at the University of Puget Sound, who has conducted research into Indonesia’s telecoms sector. “Whereas in the United State most people have resisted larger phones, and certainly using

tablets as phones, this practice is common in Indonesia.”

But the revolution is just getting underway, as only an estimated 50 million Indonesians currently have mobile internet access (fixed-lined access is miniscule). That number is expected to more than double to 120 million within a few years, largely due to increasingly cheap, internet-ready mobile phones.

With highly engaged users, readily available technology, and, importantly, limited censorship and government restrictions, the door is open for the country to grow further into a major mobile and media market.

“As more rural people get smartphones and data plans, I expect rising awareness and faster turn-around of cultural trends … It will also allow people to explore interests and connect with people in interest-based online communities,” says Bakrin.

It is a move the government backs.

Newly inaugurated President Joko Widodo – popularly known as Jokowi – has stated that improving Indonesia’s

contracts and the fact that most phones are either unlocked, or can easily be unlocked for a low price at a neighbourhood mobile shop, means that users here can far more easily switch phones, carriers, and networks than their counterparts in the United States or Europe.

It should not come as a surprise then that, according to one university study, students averaged five changes of primary phone a year.

What may be dominant this month may not be so next month, which means companies need to be conststantly improving and adapting if they want to continue to remain relevant players in a volatile and fickle market.

According to a 2013 report by the Boston Consulting Group, Indonesia’s middle class is projected to double to 141 million consumers by 2020. In other words, Indonesians are early adopters of social media and are fluid in their technology choices, but these are not the only grounds for growth in mobile telecommunications.

Take e-commerce, which continues to be held back by the same infrastruc-

“Culturally, we are raised to socialise and make many friends” Muhammad Fikri, blogger and youth activist

outdated telecoms infrastructure is a priority, providing Indonesians with access to high-speed internet. Amid ever-rising smartphone sales, improving mobile-data speeds is critical to addressing local demand and Jokowi’s goals.

The country’s big three telecom providers – Telekomsel, Indosat, and XL Axiata – have been investing heavily in improving 2G and 3G access, but the country’s vast geographic spread and population distribution have led to uneven service. Even in Jakarta, it is common to hear mobile users discuss how certain providers are better in particular neighbourhoods. Indosat may be the best in Thamrin, but if you live out east in Kelapa Gading, better go with Telekomsel. To get reliable mobile data access in Indonesia, many Jakartans get a dual-SIM phone and pick up cards from several providers.

This has led to an incredibly competitive and fluid market. Lack of carrier

ture challenges facing mobile data, but is growing fast. Mobile payments remain poorly developed, especially when compared to African countries such as Kenya. Increased investment and development in both of these fields may pave the way for further monetisation of Indonesia’s mobile market.

Meanwhile, an issue overshadows all these other bottlenecks – limited local products. Currently, most of the popular apps and mobile technology used in Indonesia have been developed abroad.

That is beginning to change as startup incubators and technology networks expand in cities such as Jakarta, which recently hosted StartUpAsia. As the market grows, Indonesia is becoming fertile ground for game and app developers.

Local content production is also rising.

All signs point to a bright future. Perhaps the next Path, Line or M-Pesa will be born in Jakarta, one of the Twitter capitals of the world.

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