Bridging the Digital Divide: Indosat’s Drive for Broadband Penetration in Indonesia

In this case, broadband concepts and their adoption in developed and developing countries around the world, particularly Indonesia, will be discussed. The telecommunications sector in Indonesia had an underdeveloped infrastructure and was dominated by two monopolies, PT Telkom and PT Indosat (“Indosat”) for many decades until the government opened the sector to competition in September 2000. As a result, the market was tremendously competitive. This case underscores Indosat’s proposed strategies to succeed in this market, with broadband penetration identified as one of the key revenue and growth areas for 2008. As in most developing countries where telephony infrastructure fixed is minimal, the plan for broadband technology is to evolve through wireless platforms. This case study can be used to understand Indosat’s proposed strategy to promote broadband, especially wireless broadband, in Indonesia. It can also be used to analyze the general problems that arise in the provision of telecommunications services in a developing country, especially when a previously state-owned monopoly faces an increasingly competitive market. The case provides an opportunity for students to discuss the best way to implement the strategy proposed by the company, given its competitive advantages and the limitations imposed by the external political, regulatory and economic environment.

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