Indonesian Internet Status

Budi Rahardjo
Web: budi.rahardjo.id
Twitter: @rahard

version 0.2. Last updated: July 2016


A long time ago, late 90s(?), I wrote a document on the Internet situation in Indonesia. I thought, as the internet grows, there should be a better and more complete documentation about this topic. Unfortunately, that is not the case. I received a lot of questions about the Internet situation in Indonesia. Thus, thus report.

Introduction

Indonesia is a large country, physically and logically. Out of 250 million population, there are more than 100 million cellphone users and growing. Information Technology (IT) adoption rate is high. There are more than 300 cellphone numbers, more than the number of population. Some people have more than one phone numbers. The behaviour of changing phone numbers is due to perks from various telecomunication operators (for geting new SIM card). It is estimated there are more than 100 millions internet users. In any case, this is a large market.

Telecommunication Infrastructure

Wired infrastructure is a challenge in Indonesia, since the area is widespread with more than 17.000 islands. Telecommunication is monopolized by PT Telkom, a public and government-owned company. The number of wired (conventional) phones is still in millions (need more data here), although it is way below the number of cellphone users.

Given the area constraint, the wide spread adoption of wireless infrastructure is understandable. In terms of cellular coverage (and including 3G/4G connections), Indonesia is one of the highest. [Need reference here.] The biggest operators are Telkomsel, IM3 (Indosat), and XL Axiata.

There are more than 200 internet service providers (ISP) in Indonesia. Only a few of them are profitable. Some of them are using the license for other purposes, such as VoIP and the like. These ISPs belong to an association, called Asosiasi Penyelenggara Jasa Internet Indonesia (APJII).

The profile of Internet users in Indonesia is available in this report. Profil Pengguna Internet Indonesia (in Bahasa Indonesia).

Social Media

Social media adoption in Indonesia is high. (Reports from Social Bakers.) Indonesians are chatty. "Funny" applications such as Dubsmash, Smule, and the like are very popular in Indonesia.

Facebook is still the number one social media in Indonesia, although the number is declining. Younger generation is moving away from Facebook. When asked, informally, these younger users do not want in the same platform as their parents.

Twitter is a popular application, but it is in declining mode. An online and live view of tweets map is available at onemilliontweetmap.com/. We can see activities from Indonesia. Here is an example of snapshot taken at 7:40 AM, 7th June 2016. (We still need data for the number of users)

Path is another popular application in Indonesia. Infact, Indonesians are the number one users in Path. It was reported that because of this, an Indonesian company invested in Path.

Chat applications

Indonesians are chatty, online and offline. Thus, chat applications are popular in Indonesia. Currently, the number one chat applications is Whatsapp. Blackberry's BBM used to be the number one, but it is dying. Only old people who already got used to (and are still using) BlackBerry devices are using BBM. They were too late to open their application to other (especially Android) platforms. Telegram is also a popular application for the more tech-savvy users.

Update (27 June 2016): PT Elang Mahkota Teknologi Tbk. (Emtek, IDX:EMTK) has just bought BBM for US$ 200 millions. (See the news here) They said that BBM is still the number one in terms of the number of users (60 millions). Time will tell whether they are doing the right thing.

Younger generation uses Line more than other applications. They like the sticker feature of Line.

Current Trends

There are several hot things in Indonesia. Go-Jek, a motorbike taxi application is hot. (Ojek = motorbike taxi) It has several applications, such as Go-Food (to order food from various places).

Market place is still hot. There are several electronic market places; Tokopedia.com, Bukalapak.com, Blibli.com, Olx.co.id, Lazada.co.id, Shopee.co.id, Blanja.com, MatahariMall.com, and many more. They receive large investments from various VCs. The reason that this area is hot is that Indonesia has a large number of internet users and online shopping is happening. They all want to be the Alibaba of Indonesia. However, frauds are looming. We believe that this are is still hot, imature, and closing quickly.

Aside from those "generic" market places, there are specific market places. For example, there are market places for Muslim fashions that are gaining popularity.

(Here is an article about the amount of investmet in Tokopedia vs. Bukalapak. In Bahasa Indonesia)

Table 1. Market Places in Indonesia
Name Founder / Investor Description
Tokopedia Leontinus Alpha Edison (CTO), William Tanuwijaya (CEO) number 1 in number of users
Bukalapak Achmad Zaky number 2 in number of users
Blibli.com
Lazada.co.id
MatahariMall.com
Olx.co.id
Blanja.com PT Telkom Indonesia
Shopee.co.id

Human Resources

One of the important ingredients in tech scene is the availability of human resources. The problems with human resources is similar to those in other countries. Indonesia has a good pool of talents. Unfortunately, due to the Indonesian's culture that dislikes showing off, most of Indonesians do not want to say that they are good. Thus, not knowing to most people outside Indonesia.

The places where IT-related talents are located are in Jakarta, Bandung, and Yogyakarta. Jakarta, the capital, is where people want to go. Unfortunately, living cost is high in Jakarta. Thus, salary is also on the high side. Bandung and Yogyakarta are much cheaper than Jakarta. Thus, the startegy is to open the main office in Jakarta but open the development centers in Bandung or Yogyakarta. Bandung is only around 200 Kilometers from Jakarta. (About 3 hours driving.) But, there are frequent flights from Jakarta to Yogyakarta. (I live in Bandung, so I tend to encourage creating development centers in Bandung.)

Bandung has Institut Teknologi Bandung (ITB) as the main technology university. Some people compare it to MIT. (Although, comparison to Stanford is much better.) Most of the lecturers (professors) are graduated from various prominent univesities abroad. It is one of the best tech universities in Indonesia. In Jakarta, there is Universitas Indonesia (UI) and in Yogyakarta there is Universitas Gajah Mada (UGM).

Miscellaneous

Just like in other parts of the world, the need to imitate Silicon Valley -dubbed as Siliconia - is also happening in Indonesia. It has been started in 1997 with Bandung High Tech Valley (BHTV) initiative. It has generated numerous efforts. There is an initiative to create Bandung Technopolis, a new Bandung area, by Ridwan Kamil (Bandung's Mayor). This is where new (creative) companies will be located. Supports from various countries have been confirmed. Stay tuned on this initiative.

Recently, in Jakarta there have been places to start up, Slipi area (dubbed: Slipicon Valley) and BSD. [Indonesia Building Smart City from scratch.]

Concluding Remarks

In short, Indonesia is a huge market for internet and technology-related applications. There will be new developments in this area. This report will be updated regularly.

References

  1. APJII, Profil Pengguna Internet Indonesia
  2. Tech In Asia, Indonesia Building Smart City From Scratch
  3. Emtek bought BBM
  4. Bedah Dompet Bukalapak-vs-Tokopedia

About the author

Budi Rahardjo is an internet expert in Indonesia. He was in the right place and the right time for certain technologies. He was an early adopter of the World Wide Web since its inception in the early 90s, just because he had to use a NeXT computer. He embraced Linux also since it was a text-only OS, just because he had to use UNIX-like OS for his experiments. He also programmed in Java, just because he had to use a JavaStation for work. He was the maintainer of FTP site for MS-DOS port of Perl, his programming language of choice. He holds PhD degree in Electrical Engineering from University of Manitoba, Canada, specifically in VLSI IC (Integrated Circuit) Design and Formal Methods. He ran the Indonesian .ID domain since 1997 to 2005 (and formally redelegated the responsiblity a few years after that). He started ID-CERT (Indonesia Computer Emergency Response Team). He founded several tech companies. Currently, he is a mentor for many start-up companies in Indonesia (and Singapore) and also part of the Founder Institute. His current initiative is Insan Music Store, Indonesia's prominent digital music store.