Indonesian cellcos pressured to consolidate

21 Jan 2016

Indonesia's telecom minister Rudiantara has warned the nation's seven smaller mobile operators to merge or deploy wireless broadband networks or face having their licenses revoked.

Bloombergreports that the minister believes that Indonesia's 10 mobile operators should consolidate down to a maximum of four through mergers or market exits by the time his term ends in 2019.

Some operators have failed to meet the requirements of their licenses to invest and build networks, which will allow the minister to revoke licenses if he chooses.

But he said he is taking a pragmatic approach and encouraging the companies to merge to have enough combined resources to fund network rollouts and retain their licenses.

Indonesia's mobile market is currently dominated by Telkomsel, Indosat and XL Axiata, which together own around 80% of the market.

Indonesia is certainly an attractive market, with more than 300 million mobile subscribers nationwide.

This leaves seven operators battling over the remaining 20% of the market, although some license owners do not yet even offer wireless services. Rudiantara said this situation is leading to inefficiencies such as spotty coverage in parts of the country.

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