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T Indosat, the second largest mobile phone operator, expects data subscribers to be its largest subscriber base this year as data consumption, coupled with smartphone purchases, is expected to strengthen this year.

“We expect data subscribers to increase from 49 percent to 60 percent,” Erik Meijer, director and chief commercial officer at Indosat, said on Tuesday.

The proliferation of devices would prompt the increase in data subscribers.

Data from the International Data Corporation (IDC) showed that 13 percent of the 60 million mobile phones shipped to Indonesia this year were smartphones. The percentage is expected to reach 16
percent this year.

Amid the increase in mobile phone users, Indosat saw the size of their subscriber base fluctuate last year. In the first quarter, the company said it booked 52.1 million subscribers but the number dipped by 2.3 percent to 50.9 million subscribers in the second quarter, partly due to changes made to its offers to customers.

According to its financial report, Indosat’s subscriber numbers rebounded in the third quarter when an additional 4.6 million subscribers joined its network.

Indosat, however, still faces tough competition. Market leader PT Telekomunikasi Selular (Telkomsel) has approximately 121 million subscribers, 51 million of whom are data subscribers.

Meijer added that each data subscriber could generate as much as 30 times more traffic than three years ago.

Data from IDC showed that the fixed and mobile broadband service market was worth US$650 million in 2012. This value is expected to increase beyond $1.1 billion this year as people use more data, prompted by the falling prices of broadband packages and portable modems.

“We could barely raise tariffs in these past three years,” he said adding that the company still
managed to earn profits from their data service as data usage brought in higher average revenue per user (ARPU) — or the revenue contributed by each user.

“The ARPU for data subscribers is Rp 40,000 [US$4.14] whereas our overall ARPU, including voice, text and data subscribers, is Rp 27,000,” Meijer said.

He declined to mention the additional revenue Indosat would receive from the expanded data
subscriber base.

In the period of April to June, the company suffered a net loss of Rp 148.5 billion, diving 161.7 percent compared to the same period the previous year.

The operator attributed the drop to a Rp 522.3 billion foreign currency loss in the second quarter.

The company has not yet released its 2012 audited financial reports. However, financial
performance improved at the end of the first nine months
of 2012 as the operator earned Rp 1.6 trillion in net profit, recording a 55.4 percent increase when compared to the same period in the previous year.

Total revenues during the first nine months touched Rp 16.5 trillion, a 7.6 percent increase compared to the same period in the previous year.

Meijer said that in 2013, the operator sought to grow at least in accordance with industry growth. He said that data subscribers contributed about 20 percent to the total revenues last year.

“The operator industry is expected to grow between 7-8 percent this year,” he said.