Indosat: Operator Consolidation Strengthens Indonesia's Telecom Industry
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JAKARTA, Investortrust.id—Competition in Indonesia’s telecommunications industry is becoming more streamlined, with just three major mobile operators now dominating the market. Indosat Ooredoo Hutchison’s (ISAT) Director and Chief Business Officer, Muhammad Danny Buldansyah, said the consolidation trend will make the industry healthier and more competitive.
"A consolidated market clearly makes the industry healthier," Danny said during a press conference at Indosat headquarters in Jakarta, Thursday, Mar 13, 2025. "Hopefully, we won’t see new operators emerging."
Danny explained that having three major operators is ideal for Indonesia, noting the positive impact of recent industry consolidation.
"Initially, there were six operators, then reduced to five, four, and now three. Each step made the market healthier and more stable," Danny explained.
Indosat itself resulted from the merger between Indosat Ooredoo and Hutchison 3 Indonesia (TRI) in 2021. This merger created a stronger entity, officially operational since January 2022, significantly reinforcing Indosat’s market position.
XL Axiata-Smartfren Merger Strengthens Competition
Further consolidation is anticipated with the upcoming merger between XL Axiata (EXCL) and Smartfren (FREN), which recently gained approval from Minister of Communications and Digital, Meutya Hafid.
Danny commented that while four operators could remain viable if market shares were balanced, the reality of significant disparities in subscriber numbers and infrastructure among operators makes further consolidation a logical step.
"An unhealthy industry results from market-share disparities. If one operator becomes excessively dominant and the others too small, market equilibrium is disrupted," he stated.
With fewer operators, Indonesia's telecom sector is expected to concentrate more on infrastructure development and improved customer service quality. Ultimately, consolidation aims to enhance the national telecom industry's global competitiveness.