The Mobile Internet Report Key Themes*

Indonesia –
Mobile Could Accelerate Still-Nascent Overall Broadband Adoption
• Broadband growth is picking up but lack of PC ownership and high cost of network upgrades has resulted
in slower than expected broadband take-up
• Wireless broadband likely will be the preferred Internet access mechanism in a fixed line-starved country
like Indonesia
• The outlook for wireless broadband growth is robust. All wireless operators have started pushing wireless
broadband with Telkomsel’s product “Flash” already gaining popularity. We believe Telkomsel has a headstart
over its competitors in this space
• Telkomsel’s access to TELKOM’s transmission / fiber infrastructure helps drive wireless broadband
growth since backhaul costs are still prohibitively high in Indonesia
Indonesia Broadband Subscribers & Household Penetration, 2005 – 2008
800
1.2%
Total Broadband Users (000)
600
400
200
Broadband subs ('000)
Broadband penetration
1.0%
0.8%
0.6%
0.4%
0.2%
Broadband Household Penetration
(%)
-
2005 2006 2007 2008
0.0%
Source: Company data, Navin Killa, Morgan Stanley Research.
627