Telkom Strategy in Building Fixed Broadband Golden Era

Ilustrasi (dok)

JAKARTA (IndoTelko)  - Based on an IBM conducted research titled "Telco 2015: Five telling years, four future scenarios" revealed an interesting phenomenon.

When asked to a number of respondents on what will be sacrificed if the economic crisis continues, then the top four answers the respondent to keep are home, mobile phone, broadband internet access and landlines are in the top four.

This answer shows that broadband Internet access has become an essential requirement. In fact, if you look at the latest results from Ookla Net Index revealed an average content download speed with fixed broadband in Indonesia is only reached 5.3 Mbps, and 3.2 Mbps upload for uploading.

Indonesia is among the countries with the slowest internet access speed in the world. Based on data from netindex, Indonesia still ranked at 142 on the household download index.

Moreover, the internet subscription cost per Mbps per month in Indonesia is also deemed to be expensive at US $ 17.27 or three times more expensive than the global median value of US $ 5.46.

"The opportunity of Fixed Broadband Growth in Indonesia is still widely open. Based on the overview there are 60 million households in Indonesia but the penetration rate of this new service only reached 5% or only 13% penetration rate of the number of households in which there connected to the internet," said Telkom's Director of Consumer Services Dian Rachmawan to IndoTelko, Sunday (25/1).

According to Dian, the Fiber To The Home (FTTH) technology will be the key to success in fixed broadband business up to five to 10 years ahead. Even the FTTH technology is considered more decisive than the 4G mobile broadband technology.

Strategy
Since Telkom is managing the fixed broadband business for consumer segment for about 10 years, until now it only able to penetrate about three million households.

In 2015, Telkom set a high target that there are five million fixed broadband subscribers, or increased to two million subscribers in a year.

"The five million fixed broadband population baselines is a turning point in market share by Telkom to go golden gate and glory in the years ahead along with Telkomsel's Leadership position in the mobile broadband business," Dian said.

To implement the ambition, Dian has prepared a "turn-around strategy". The philosophy of this strategy is to show differentiation and clear competitive advantage over competitors, whether the use of mobile and fixed broadband technology.

"Now we are accentuating on the IndiHome brand, Speedy is no more. We will accelerate the Triple Play with single billing. It's emphasizes the differentiation from competitors, "he said.

The Tripleplay services (Internet, IPTV, Phone) is packaged in an Indihome brand using FTTH infrastructure called Indihome Fiber. Based on the focus on FTTH, then Indihome Fiber is targeted to be a market leader in the fixed broadband industry in Indonesia.

For infrastructure that still uses the Multi Service Access Node (MSAN), Indihome is offering with up to 5 Mbps internet speed. Indihome on MSAN is positioned to support the leadership market position of Indihome Fiber.
While Speedy that still using copper wire infrastructure which only have 2 Mbps optimum speeds will be reduced gradually.

Speedy is an old brand of Telkom's fixed broadband service that is offered in a single scheme or unbundled product. As many as 85% Speedy customers are still using the service package with speeds below 1 Mbps.

In fact, 55% of customers still subscribed to the old package. This condition made Speedy is surrounded by competitors such as Innovate or First Media that are always accentuate the Triple Play at affordable prices.

Such strategy will give various impacts at once, namely a better value proposition for customers, higher average revenue per account or ARPA, which will create a space of higher revenue growth.
Lastly is that the integrated services or single billing bundling will improve customer bonding or customers attachment level with Telkom.

Pricing
In terms of price, it was planned that the pricing scheme is designed the plan is designed to be adaptive on each region’s competition dynamics.

This scheme also made the pricing categorization is based on market share and competition level. The pricing category includes Winning Back, Attack, Barricade and Defending.

"I will impose aggressive sales to ensure optimal utilization of production equipment, especially FTTH. One of the sales performance measurement used is the connect rate," Dian added.

Connect rate is the ratio between the Connected Homes for Homes Passed. Homes Connected is the number of homes that are already connected to Telkom's FTTH network or subscription service.

Homes Passed is the amount of all the houses located in the coverage area or Telkom's service area, which indicates the number of potential homes that FTTH could served. Connect rate is also used as an indicator of the effectiveness of the deployment of FTTH.

"If everything goes smoothly, I am optimistic that we can reach three million triple play Indihome subscribers in 2015," Dian concluded.(es)