RI’s mobile phone penetration triples in five years thanks to younger users, cheaper rates

Mobile phones have become more popular among Indonesians in recent years with penetration rates almost triple that in 2005, due to an influx of younger users, according to a recent survey by the Nielsen Company.

Of 15,000 respondents surveyed in nine big cities in Indonesia in 2010, 54 percent, or around 8,100 respondents, owned mobile phones, up 34 percent from 3,000 people in 2005.

The survey in 2005 also had 15,000 respondents.

While mobile phones have more penetration, land-line ownership significantly slid: Only 11 percent of respondents, or 1,650 respondents, said they used land-line telephones, a 14 decrease from 3,750 people in 2005.

Nielsen Telecom Practice Group director Viraj Juthani recently said that people traditionally were initially connected by land-lines and later shifted to mobile phones.

However, Indonesia and other growing markets broke the rules: People went straight to mobile phones.

“It is different in many growth markets such as Indonesia where telecommunications developed from not being connected to being connected through cellular phones,” Viraj said in a written statement.

According to Viraj, while customers aged between 20 and 39 have been behind the widespread use of mobile phones, it is younger people who have fueled robust expansion of the country’s mobile phone market.

Viraj cited the growth of usage among teens from 15 to 19 years old, which tripled in 2010 to more than 70 percent, up from 20 percent in 2005. Similar growth also occurred among younger users from 10 to 14 years old.

Viraj said that multitasking facilities such as text messages and voice calls boosted the popularity of mobile phones among young people.

The Nielsen survey also revealed another important finding: More customers were spending less to communicate with mobile phones. In 2010, 58 percent of respondents said they spent less than Rp 50,000 (US$5.60) on mobile phone service, almost triple than 18 percent in 2005.

“There could be two reasons to explain this trend. The first is that rates have gone south since 2005; another is that new segments with limited spending capacity are entering this category,” Viraj said.

According to the survey, blue collar workers, students and housewives were the drivers of this lowest-spending category. Taken together they contributed to the increasing popularity of CDMA telephones, with a market share of 26 percent last year compared to only 5 percent in 2005.

Blue collar workers comprised 38 percent of total CDMA users followed by students at 20 percent and housewives at 15 percent.

The tremendous growth in the mobile phone market was reflected in advertising spending for promotional activities by telecommunication companies.

Telecommunication firms were the largest advertising spenders in all media segments last year, with total spending topping Rp 5.55 trillion, nearly double the Rp 3.88 trillion spent in 2009, contributing 9.25 percent to expenditures of Rp 60 trillion in 2010.

The survey found PT Telkomsel was the biggest advertiser with a total spending of Rp 1.49 trillion, followed by PT Indosat with Rp 639 billion and PT XL Axiata Rp 631 billion. However, Excelcomindo XL as a single brand spent the highest with Rp 594 billion. (lnd)