Succeeding in the Age of Mobile Data - A Study of the Indonesian Telecom Industry

Examensarbete för masterexamen
Master Thesis
Management and economics of innovation (MPMEI), MSc
Blum, Therese
Kajsjö, Robert
Mobile network operators (MNOs) in Indonesia are currently facing some major challenges as consumer preferences are changing. Revenue streams from legacy services such as mobile voice and SMS are on a downward trajectory, while the demand for data is soaring. The Indonesian MNOs have experienced challenges when trying to shift focus to monetize mobile data instead of legacy services, making data less profitable. This study maps out the Indonesian telecom industry and explores options for how the MNOs can innovate their business models to monetize mobile data better. The competitive situation is different depending on what geographical area you consider. Outside Java there is mainly one dominant player, while Java is characterized by intense competition, making the average profitability lower. The lower profitability is explained by the five forces framework. Three out of five forces are strong on the Indonesian market: rivalry among incumbent firms, bargaining power of buyers, and threat of substitutes. For the average profitability to increase, consolidation is necessary. However, the high customer churn rates and the spectrum policy, lowers the incentives for consolidation. To monetize mobile data better the MNOs need to circumvent some country specific factors while elaborating on others. The Indonesian population is very price sensitive, wherewith it is hard to make them pay a sufficient amount for data. It is therefore necessary for the MNOs to redefine the customer to include others than the end consumer to collect the potential value on the market. This can be done by elaborating on the country’s liberate regulations concerning net neutrality. Moreover, the Indonesian MNOs need to find ways to differentiate; either by being a provider of connectivity, using the quality of the network as the main selling point, or by being a provider of a digital ecosystem, where connectivity serves as means to an end rather than the end itself. The biggest difference between the strategies is that the MNOs choosing the latter would need to pursue two business models simultaneously, relying on ambidexterity within the organization.
Transport , Övrig industriell teknik och ekonomi , Transport , Other industrial engineering and economics
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