Indonesian telcos could enjoy better margins as more take up home and mobile broadband bundles

TELCOS in Indonesia, such as Telkom and XL Axiata, have begun introducing fixed and mobile broadband bundles to capitalise on growing demand for video streaming. As takeup rates improve, analysts said companies could enjoy reduced customer churn and higher margins.

While fixed broadband infrastructure has expanded slower than mobile broadband infrastructure in the past, Maybank Sekuritas Indonesia analyst Etta Rusdiana Putra said telecoms operators have been expanding their fixed networks rapidly in recent years.

“Two decades ago, communication was only voice and SMS; and the cellular network is more mobile and convenient than a fixed phone line. Hence, demand for mobile services was higher than for fixed lines,” he said.