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Indonesia’s Lasting Love for Mobile Phones Axis Capital Group Jakarta XL Axiata PT Telekom
A man uses a cellphone as he sits in front of the Batavia Air office at Soekarno-Hatta International Airport outside Jakarta. (Reuters Photo/Beawiharta)
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It was all black with a sleek curve to match the shape of your face as you talked, and a smooth black cover which slid down to reveal a keypad to make a call. It felt so futuristic that it was used in the first Matrix film, tech writer Aulia Masna gleefully pointed out as he rehashed the memory of his first cellphone back in 1996, the Nokia 8110.
“The screen of the 8110 was tiny by today’s standards, but enough to show a single SMS without having to scroll too much,” Aulia said.
Telecommunication companies weathered a wobbly start due to rupiah inflation in the late ’90s, but few could have imagined the immense growth of the industry in Indonesia. The sector is about to hit its 20th birthday with three companies, Telkomsel, XL Axiata and Indosat, maintaining a stranglehold on one of the world’s biggest mobile phone and data markets.
Today, in the world’s fourth most populous nation, there are more active mobile subscriptions than people.
Connecting an archipelago
Ten years ago only two out of every 45 Indonesians had access to a fixed telephone, according to Redwing Asia. Although cellphones and mobile networks were available since the late ’80s, through the now defunct AMPS network, many Indonesians living in rural areas had few methods of quick communication available to them. Traditional letters and motorcycle couriers were still the primary form of communication in the villages of Indonesia.
One of the biggest hurdles phone companies had to overcome to connect the nation was Indonesia’s unique geography.
“The coverage requirements for operators in Indonesia are quite complex,” said Paul Hemming, director of Redwing Asia, a company that analyses the technology market in Asia. “There are over 17,000 islands, the nature of coverage is very different from a country like America. The cost of operation is therefore higher as well.”
Due to Indonesia’s late entrance into mobile telecommunications coupled with a complex geography, the industry skipped over an entire generation of landline phones that usually make up traditional networks.
Indonesian telecom companies found that laying down traditional copper telephone lines to connect islands was too costly, so the industry jumped straight to building mobile phone networks, Hemming said.
In a country where there are still only nine million fixed phone lines, mobile phone calls and SMS messaging are the dominant form of communication.
Amid the first years of SMS messaging, Indonesian farmers found it to be an indispensable tool for commerce. “They would compare prices at various markets over SMS and ship their goods to the market that would give them the best return. A trading community formed around messaging,” Hemming said.
Smartphone syndrome
The dawn of mobile connectivity that offered Internet access also brought the ascension of smartphones in Indonesian culture.
“As for the smartphone revolution, the answer is pretty easy: it was BlackBerry that kick-started the entire thing,” Aulia said. “The BlackBerry was the status symbol for the haves, never mind that they could only use it for voice calls and SMS due to the non-existence of BlackBerry data plans.”
BlackBerry, once a giant in the smartphone industry, has fallen on hard times as CEOs have departed and profits fall. After years of neglecting its overwhelming popularity in Indonesia, to the point where the Indonesian government threatened to levy sanctions after an outage that left Indonesian BlackBerry Messenger users fuming in 2013, Blackberry is looking to capitalize on its South Asian popularity.
The Jakarta, as it’s been nicknamed, officially the Z3, is the first ever smartphone targeted at the Indonesian market by a major mobile phone maker. Retailing at Rp 2.2 million ($185), the Jakarta phone is hoping to undercut the competition while capitalizing on its strong brand to help BlackBerry get back in the black. “It’s a last-ditch effort for BlackBerry,” Hemming said.
In laser-lit clubs where young Indonesians flock to flaunt their wealth, like the glitzy Dragonfly club in Jakarta, the gold-tinged iPhone 5S is the ultimate status symbol. The latest and greatest model of the iPhone costs more than twice the average monthly office worker’s salary.
“In the past a young adult starting to smoke was a symbol of adulthood; now owning a smartphone is more of a symbol than smoking,” Hemming said. “People will go to great lengths to get the latest and greatest smartphones, they make sacrifices in terms of clothing, cigarettes and transportation.”
Indonesians have even christened the smartphone phenomenon with it’s own slang: gengsi , a word that describes someone who needs to own the latest gadget at all costs and be able to flaunt it.
Social phenomenon
While the rise of smartphones in Indonesia has left some with an unsavory materialistic aftertaste, they have helped to boost the nation’s standing.
Jakarta is the world capital of Twitter — no other city is more active on the social media platform. The nation’s capital makes up 2.4 percent of Twitter’s entire traffic.
“We can see more opinions, the news is available to everyone now. It feels more open,” said Adi, a political science student at a recent presidential debate.
Twitter is one of the main sources of news for Adi, who works as an organizer for the Joko Widodo-Jusuf Kalla presidential campaign. Many students and young Indonesians like Adi learn about breaking political developments from Twitter, such as the controversy that followed presidential candidate Prabowo Subianto retweeting a campaign video by rocker Ahmad Dhani featuring Nazi symbolism.
Path, now part-owned by a local firm, is one of the biggest social networks in Indonesia. Combining aspects of Instagram, Twitter and Facebook, over four million Indonesian users are on the network. But with so many photos, videos and statuses being shared through the application, Indonesia’s aging 3G networks are feeling the strain.
The latest 4G LTE coverage in Indonesia was finally launched last year by wireless Internet provider BOLT, but it has yet to bring relief to smartphone users as the service is only available in Jakarta and most users never achieve speeds higher than on 3G networks.
The nation’s appetite for social media has left many feeling disconnected from one another. Indonesians on average spend about nine hours a day viewing one or more screens like TVs, smartphones, computers and tablets. That’s the highest in the world, according to Redwing Asia.
“The discussion is what’s important,” said Adi of the new interconnectedness.
“It’s more important now because of the election but also because we never had a chance to do this before.”
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