IBB New Media Technologies Study: Indonesia

November-December 2009

This innovative study was conducted at the request of IBB’s Office of Research as the fourth of a series of in-depth studies in key markets focusing on new technologies, specifically mobiles and the internet.

The proliferation of the internet and hand-held mobile devices is dramatically changing the ways in which consumers interact with media, leading to new opportunities for content distribution and possibly threatening traditional dissemination models. InterMedia developed a program of qualitative research to better understand these changes and the implications they may have for the IBB.

Available for download

Full Report - Executive Summary - Analytical Report - Appendices

Executive Summary

Mobile and Internet Markets:

• With its population of 240 million, Indonesia is expected to experience further significant growth in the number of new media users. However, at present, new media penetration is unevenly distributed: while major cities, especially the capital Jakarta, are well served, smaller cities and rural areas are poorly covered.

• Infrastructure problems persist, putting a significant burden on mobile networks. Indeed, infrastructure expansion has failed to keep pace with the exploding number of users during the past few years, causing strain on the networks. Similarly, crucial improvements need to be made to meet demand for fixed internet connections, but investments are lacking.

Mobile Phones:

• There is intense competition among mobile service providers vying for customers. Price wars have caused prices to drop significantly, making mobile phones accessible to most socio-economic strata. However, the use of sophisticated non-voice applications is still a privilege of the urban and affluent. 3G services, which were launched in 2006, are still mainly limited to urban centers and leave large patches of Indonesia without access, although there has been significant progress of late to expand coverage.

• Indonesia has a dual infrastructure of both GSM and CDMA networks. Many study participants use two phones: a CDMA phone for making calls, because the rates are cheaper, and a GSM phone for profiting from 3G networks. Blackberry is the most popular phone among study participants, in part due to some applications that are unique to the brand, such as the widely used Blackberry Messenger (BBM), which allows Blackberry owners to trade instant messages.

Mobile Device Use:

• The Indonesian mobile market—with its many providers each offering multiple brands—allows consumers to tailor plans and prepaid packages to their individual use patterns. Users pick and choose elements, such as calling minutes, SMS and data (the elements can be paid for by time or volume) and bundle them according to their needs.

• Study participants use SMS—but less frequently than in the past. With the availability of instant messaging on their mobile phone, they use SMS mainly to communicate with those people that do not use internet on their mobile phone, such as vendors or out-of-town relatives. MMS is not popular at all; participants prefer to share pictures through their mobile Facebook application—a method that is both cheaper and more reliable than MMS.

• Although the young, urban early adopters recruited for this study have near constant interaction with new media, they limit their use mostly to communication and to social networking. When they look for information from their mobile devices, it is mostly practical, such as movie schedules and traffic updates. Few are interested in hard news. Study participants access some news sites from their mobile device, such as the mobile version of detik.com. Participants also receive and share news through “online word-of-mouth” on their mobile devices, via Facebook, Twitter, etc. Focus group participants expressed very limited interest in SMS for news. These services are available from mobile operators and from third-party content providers, but participants prefer to access the internet for the news they want. Audio and video content is less popular, since it requires more bandwidth.

Fixed Internet:

• Fixed internet access poses significant infrastructure challenges, which is one of the reasons why the number of home internet connections in Indonesia is still relatively limited. There are more mobile broadband than fixed broadband connections in Indonesia. Due to the nature of Indonesia’s geographic spread across thousands of islands, the running of under-ocean fiber optic cables carries an expense that is not viable for the private sector. The government pledged to connect more Indonesians with ICTs, but the rhetoric has yielded few tangible results to date.

• Internet use is still mainly an urban privilege. The experts interviewed for this study suggest that barriers to growth run deeper than the access issue. A lack a computer literacy, internet education, and a perceived lack of need and benefits from the online experience are expected to keep parts of the population from becoming active on the internet.

• Although most study participants have home internet access—a feature that sets them apart from the vast majority of the population—they still often access the internet from other locations such as school or mall WIFI hotspots, their workplace, or on the go through mobile broadband.

Online Activities:

• Focus group participants go online for social networking, general browsing, discussions and forums, email communication, blog reading, and online gaming. Podcasting is not a popular activity.

• Social networking—the core of online activities for younger focus group participants—takes places mainly on Facebook and Twitter. Many begin and end their days by updating their status and provide constant updates throughout the day.

Changes in Traditional Media:

• Major broadcast and print outlets in Indonesia reacted to the increasing use of new media by offering websites and even mobile versions of their websites, by establishing a presence on social networking sites, and by offering multimedia content.

• The increased use of new media paved the way for increased multitasking. Study participants, for example, use Facebook while they watch TV.

• TV’s importance as a news medium is diminishing, as participants are more likely to get their news online. Nonetheless, TV is believed to remain an important news medium for years to come. Focus group participants do not regularly read printed newspapers, probably because of their youth. Female participants are avid magazine readers, but they are mostly interested in fashion or celebrity news. Most study participants listen to the radio, but do so mostly for music, not for news and information.

News and Information Online:

• According to study participants, online news is up-to-date and can be accessed anytime, anywhere. Other advantages identified include news from different media outlets and platforms all in one place, customized and searchable content, interactivity, and a wide variety of voices and opinion online. Disadvantages of online news are a lack of details, lack of credibility, and a lack of visuals.

• The most popular news sites are detik.com and kompas.com. Twitter and Facebook are also used to get and share news. In addition, Facebook is increasingly used for political engagement—several focus group participants belong to a popular Facebook group supporting well-known anti-corruption figures.