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Indonesia’s Lucrative Mobile Phone Market

Indonesia is almost like a vast continent of Islands spanning a greater distance than Europe. A nation of Islands, languages, cultures and religions that is one of South-East Asia’s true melting points. And this nation of over 227 Million people have a culture of communicating with each other by speaking, rather than by emailing.

Aside from the symbols of daily life in Indonesia – the street food stall. There is a new symbol in 21st century Indonesia, the mobile phone store, and phone credit stall – Selling anything from cheap mobile phones to pre-paid credit to mobile phone users.

Then there are the “pimp your phone” stalls, found everywhere in street markets to sophisticated stalls in air-conditioned indonesia mobile no Malls. Phone users can buy anything from mp3’s to customized casing for their phone. Indonesians express themselves through their phones, and this expression has create employment and business, for over a million people.

From the simple Cigarette stand owner, who has diversified into selling pre-paid phone credits, and numbers, to the mobile phone retailers, who seem to take up sometimes whole floors in a Mall.

Why are Mobile Phones so important to Indonesians?

When the Indonesian Government de-regulated the telecommunications market in Indonesia- What was once a luxury, became accessible for people, needing to communicate cheaply with their families, and friends, who often live all over Indonesia.

De-regulation also created over twelve new mobile phone providers. Providers that competed in a free market, where the cost of calls and sms’s continued to decrease- simply because of the intense competition.

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Phones became more sophisticated, and trendy. They were affordable to most Indonesians, and in a country were lobbying is important- essential to business.

People began switching phones as technology advanced, and hundreds of manufacturers from  Nokia to Huawei entered the market.  

Many made deals with local telephone providers. Huawei linked with one mobile phone provider to create a service linked to making cheap landline calls, across this vast nation of Islands. A cheap phone, plus an inexpensive phone provider meant a booming business for both companies.

Others have turned more sophisticated offering cheap internet services, linked with more heavyweight phone manufacturers like Nokia, and the “creme de la creme”of phone  producers – Blackberry.

Internet-based websites like Facebook.com, and yahoo.com work with some providers to offer instant access to the websites, and services. Others provide inexpensive overseas mobile phone services- aimed at loved ones either studying or living overseas.

Mobile Phones have become an essential part of Indonesian life, and the business has created much needed employment in a young country, with no real social assistance programs. Even a street vendor, can hawk mobile phone numbers, casing, and even trinkets to personalize a phone.

In 21st Century Indonesia, a mobile phone user can often call for free, anywhere in the country , or even get hundreds of free sms’s. Whilst the phone itself has become a status symbol, were with such an array of competition, the vast majority of Indonesians, now own and use a mobile phone.

ECONOMY. Indonesia is a market-based economy but the government plays a significant role in the country’s economy with 160 government-owned enterprises. Indonesia’s GDP per capita ranks fifth after Singapore, Brunei, Malaysia and Thailand. The Asian economic crisis of 1997 adversely affected the country economy and businesses and caused spiralling prices of necessities resulting in social unrest. Future prospects of Indonesia’s economy are bright with economic structural reforms in placed since the Asian economic crisis.

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Indonesia’s GDP was US$258.3 billion with a GDP per capita of US$1,193 in 2004. Indonesia’s real GDP grew at an average of 4.6% annually from 2000 to 2004 driven by domestic consumption accounting for nearly three-quarters of Indonesia’s GDP. Inflation rose from 3.8% in 2000 to 11.9% in 2002 but eventually declined to 6.1% by 2004. GDP per capita increased from US$801 in 2000 to US$1,193 in 2004 but unemployment also increased from 6.1% to 9.9% during the period.

The manufacturing sector contributed towards 43.7% of Indonesia’s GDP in 2004 while the service sector contributed 40.9%. Though nearly 45.0% of the country’s workforce is involved in agriculture, this sector contributed only 15.4% of the country’s GDP during the period. Major industries include petroleum and natural gas, textiles, apparel, footwear, mining, cement, chemical fertilisers, plywood, rubber, food and tourism. Major agriculture products include rice, palm oil, rubber, cacao, peanuts, copra and cloves.

DEMOGRAPHY. Indonesia comprises nearly 18,000 islands and has the largest population among the Southeast Asian countries with 217 million people in 2004. Main islands are Java accounting for 55% of the population followed by Sumatra (18%), Kalimatan (5%) and Sulawesi (6%). Other less populated islands include Irian Jaya, Bali and Nusa Tenggara.

Indonesia is a country of diverse ethnic and sub-ethnic communities with different languages and dialects, cultures and foods. The Javanese accounts for 45% of the population followed by Sundanese (14%) and Madurese (8%) and coastal Malays (8%). Chinese who migrated to Indonesia during the Dutch colonial period account for nearly 5% of the population. Islam is the predominant religion followed by Christianity and minority religions include Buddhism and Hinduism. The national language is Bahasa Indonesia (similar to Malay used in Malaysia, Singapore and Brunei). English is not widely used but many businesses and government officials dealing with foreign companies and foreigners are fluent in the language.

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