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Dan Swinhoe (Asia)- Indonesia's IT Market: Social Media, Undersea Cables and Smartphones
Posted b y Company IDG Connect 08/14/2012

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When it comes to IT, the Asia-Pacific region is a mixed b ag. At one end, countries such Singapore and South Korea are among the world leaders, while at the other extreme the likes of Vietnam and Myanmar are essentially devoid of IT. But there a few in the middle, countries that are up and coming, b ut still with a way to go. Indonesia is one such country. BMI is expecting Indonesian IT spending to reach US$6.0b n this year, up 12% on the year b efore, so things are looking good. "The market has much growth potential," the report says, b ut warns, "Indonesia's uneven development and digital divide are major b arriers to faster growth within this potentially huge IT market." Currently the country has around 55 million internet users, the eight most in the world. But that's just a tiny fraction (22%) of its 245 million population. That fraction is growing however; the numb er of internet users saw 29% yearon-year growth, and the signs are good this is going to improve. Predictions point to 76 million users b y 2015. Like other countries in the region, Indonesia has b een investing in undersea cab les. Soon after finishing the Malaysia to Indonesia Batam-Dumai-Melaka (BDM) system, a new 4,600km Australia-Indonesia-Singapore cab le was announced. More cab les means cheaper access and b etter quality connections, something that always helps foster growth. Despite these numb ers, it's clearly the majority are accessing the web while on the go, and not from a desk. While mob ile penetration is at 54%, PC penetration is a mere 5%, and the majority of those were netb ooks. However these figures are also on the increase with PC sales growing b y 36% last year, and could rise b y around the same amount this year. According to StatCounter, Windows XP is still the most popular OS, with Win7 not too far b ehind. Firefox is the most popular web b rowser b y far, with Chrome following a distant second. Unlike everywhere else in the world, BlackBerry still has a strong following in Indonesia, and accounts for 12 million out of around 77 million users worldwide. According to ROA Holdings Analysis, smartphone penetration stands at around 60% and is expected to rise even further. Tab lets are also on the rise. While just 700,000 were sold in the last year, the fourth quarter of last year saw sales spike b y almost 100%,indications are good that this will continue to grow at a rapid pace. This strong relationship with mob ile internet is helping drive Indonesia's love of social media. While 1 million Indonesians may have left Faceb ook in the last three months according to Socialb akers, the social network still b oasts over 40 million users. That numb er puts the country fourth in the world, still 2 million ahead of the UK. While the recent loss of such a high numb er of people may b e concerning, it may just b e a b lip, and with only 16% penetration, there is still huge potential. One of the reasons for this exodus could b e the growing numb er of phishing scams on the site that are masquerading as adult videos and photos of Indonesian celeb s. Perhaps b etter education on security would help.

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It's not just Faceb ook that's popular. Since the launch of a local language site, LinkedIn has grown quickly, with over a million joining in its first two months. Twitter is also a favorite, in January Indonesia was fifth worldwide in terms of users. Though these figures are from the start of the year, a quick view on A World Of Tweets will show the country is among the most active on the micro b logging site. Online games are also popular; TMG's KotaGames saw 85% month-on-month growth earlier in the year. Though a free country, the government does seem wary of the internet and has made several moves to censor it over the years. The Guardian rates the country has having selective' or sub stantial' censoring for political, social, and internet tools. The most recent case was the b locking of over a million porn sites ahead of Ramadan. While this is no b ig loss for the internet, censoring one kind of site could easily lead to more, and b e the start of a slippery slope. Indonesia has some real plus point. Mob ility is on the increase and b ecoming more widespread, and the laying of cab les will no doub t help facilitate this. Aside from the occasional effort to censor parts of the internet, the government is helping to push things in the right direction. But with millions still not b enefiting, there is still a long way to go.

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