New Report Says Indonesia Internet Use Booming

Jakarta Globe, Crayton Harrison & Mark Lee | September 01, 2010

Mexico City. Brazil, Russia, India, China and Indonesia will double their Internet users to 1.2 billion by 2015, fueling growth at media companies and phone carriers, according to Boston Consulting Group Inc.

Indonesians use computers at an Internet Cafe in
Jakarta. A new report says Internet users inIndonesia
Brazil, Russia, India and China will double by 2015.
(AFP Photo/Bay Ismoyo)

The countries will have three times the Internet users of the United States and Japan combined by then, up from about two times at the end of 2009, the consulting firm said in a report to be released on Sept. 1. While mobile phones with Internet access will aid growth, personal computers will double in the five countries to more than 920 million, according to the report.

As consumers gain more access to the Internet, they’ll also spend more time online, providing a boon to entertainment providers, Boston Consulting Group said. The surge in Web use will benefit media companies such as China’s Tencent Holdings Ltd. and phone carriers, including Telekomunikasi Indonesia, analysts said.

“The fastest-growing Internet markets are those with low penetration rates and strong economies, and the BRIC countries all fall into these categories,” said Jake Li, an Internet analyst at Guotai Junan Securities in Shenzhen, China. “The opportunities for online advertising and e-commerce in these markets are huge.” He recommends buying Tencent shares.

The acronym BRIC was coined by Jim O’Neill, the chief global economist at New York-based Goldman Sachs Group Inc., in 2001 to refer to Brazil, Russia, India and China as a group of rising economic powers.

Boston Consulting added Indonesia to the group because of its population of more than 240 million and its proportion of mobile-phone users, which at 66 percent is higher than China and India, said David C. Michael, lead author of the report.

“Of the three markets, China, India and Indonesia, we believe that Indonesia has the best prospects for organic growth in telecommunications revenue,” said Tucker Grinnan, head of Asian telecommunications research at HSBC Holdings Plc in Hong Kong. “There is still a big rural opportunity.”

Indonesia’s wireless subscriptions will top 100 percent of the population by 2015, meaning some users will have multiple devices, according to Boston Consulting. Grinnan advises buying shares in Telekomunikasi Indonesia, the nation’s largest phone company, and Tencent, Asia’s biggest Internet company by market value.

Bloomberg