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Internet Users in Indonesia to Triple by 2015: Report

Jakarta Globe.

The number of Internet users in Indonesia is expected to triple by 2015, fueling growth for media companies and phone carriers, according to a study released on Wednesday by Boston Consulting Group.

The study found that the total number of Internet users in the so-called BRIC nations — Brazil, Russia, India and China — and Indonesia will double to 1.2 billion by 2015.

That will be three times the number in the United States and Japan combined, up from two times as much at the end of 2009.

While mobile phones with Internet access will aid growth, personal computers will double in the five countries to more than 920 million, according to the report.

As consumers gain more access to the Internet, they’ll also spend more time online, providing a boon to entertainment providers, Boston Consulting Group said.

The surge in Web use will benefit media companies such as China’s Tencent Holdings and phone carriers including Telekomunikasi Indonesia (Telkom), analysts said.

“The fastest-growing Internet markets are those with low penetration rates and strong economies, and the BRIC countries all fall into these categories,” said Jake Li, an Internet analyst at Guotai Junan Securities in Shenzhen, China.

“The opportunities for online advertising and e-com merce in these markets are huge.”

The number of SIM cards in use in Indonesia will top 100 percent of the population by 2015, meaning some users will have multiple devices, the report said.

Tucker Grinnan, head of Asian telecommunications research at HSBC Holdings in Hong Kong, advises buying Telkom, the nation’s largest phone company, and Tencent, Asia’s biggest Internet company by market value.

“Of the three markets, China, India and Indonesia, we believe that Indonesia has the best prospects for organic growth in telecommunications revenue,” Grinnan said. “There is still a big rural opportunity.”

Only 12 percent of Indonesians use the Internet, and only 5 percent use personal computers, but both of those rates are expected to triple by 2015, the report said.

Twenty percent of China’s population owns a personal computer, compared with 32 percent in Brazil and Russia and 90 percent in the U.S. and Japan, Boston Consulting said.

Tens of millions of additional users get online at Internet cafes or shared home or work computers, giving China 384 million Internet users at the end of last year, almost triple the total in 2006, the report said.

However, mobile phone penetration in Indonesia was 66 percent, higher than in India or China.

About 20 percent of Indonesian mobile phone users have more than one SIM card, and nine percent have two phones for personal use, mostly to take advantage of discounted network rates with family and friends.

With such high mobile penetration, the study found “unusually high” rates of mobile Internet use in Indonesia, with nine million mobile users, up from just 2.3 million in 2007.

The use of mobile e-mail and mobile payments and e-commerce was highest among the five countries studied.

“Indonesian digital consumers use their mobile-handset connections to meet a variety of needs that are typically met in other countries through PC-based Internet,” it said.

“Given the prevalence of mobile phone use in general among Indonesians, and their adoption of 3G, mobile Internet could well emerge as an alternative to home PC use and become a key growth pocket as 3G becomes more affordable and available.”

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