How the combined Indosat-3’s mobile experience can reshape Indonesian competitive landscape

Mobile operators Indosat and 3 have started negotiating a merger of their businesses. Together, the new company hopes to strengthen its position in the very competitive Indonesian market and possibly even challenge the largest player Telkomsel.

If the deal completes, users may need to wait for months or even years before they see all of the benefits for their mobile experience as it usually takes time for operators to integrate their existing networks and create synergies. But some changes can arrive more quickly.

To help understand the potential for a merged company, Opensignal has estimated what our Indosat and 3 users’ combined mobile experience would have looked like if they had been a single operator, looking at the same time period as we analyzed in our last mobile experience report for Indonesia.

Our analysis combined the experience of Indosat and 3 users with the resulting scores falling in between the individual scores of the two operators. However, while Indosat scored faster average download and upload speeds compared to 3, the latter operator fared better in our experiential metrics measuring mobile video and mobile gaming experiences. This shows that it’s not just smartphone users of one mobile operator that would have seen their average experience rise if we had combined the two operators, but both groups would have seen their experience improve in some of our mobile experience categories, while decreasing in others, thus showing how the two operators shine in different mobile experience categories.

However, out of the four mobile experience categories we analyzed, only Games Experience and Upload Speed Experience showed a combined Indosat-3 score higher than the national average, while Download Speed Experience and Video Experience were below the national average. Because Telkomsel has the largest mobile subscriber share in Indonesia, that means that its score has a greater weight in the national averages. And since Telkomsel also had a considerable lead in both Download Speed Experience and Video Experience, reaching the national average was a more challenging goal for the combined Indosat-3 scores in those two categories.
 

Opensignal then analyzed how the combined Indosat-3 scores varied regionally. First, we looked at the Video Experience scores in the regions of Java, Sumatra, Kalimantan and Sulawesi, and found that Indosat scored lower than 3 in all four regions.

While in Java Indosat and 3’s individual scores were very similar, with just a 1.4 point difference separating the two operators, in Sulawesi, Sumatra and Kalimantan the differences were much larger — 4.5 points, 4.7 points and 17.6 points, respectively. Interestingly, the resulting score of the merged Indosat-3 would have been less than two points lower than the regional average in Java, Kalimantan and Sulawesi, while exceeding the regional average in Sumatra. However, while Indosat scored a Fair (40-55) Video Experience in all regions except for Java, the combined score would have exceeded the 55 threshold in Java, Sumatra and Kalimantan, resulting in a Good score (55-65).

We also looked at the Download Speed Experience scores in the same four regions — Java, Sumatra, Kalimantan and Sulawesi — and found that this time Indosat showed higher average scores in all regions compared to 3, except for in Kalimantan.

In Java, Sumatra and Sulawesi our Indosat users experienced average Download Speed Experience higher than 10 Mbps, while our 3 users in the same regions saw averages below that threshold. In Kalimantan we saw the reversed pattern with our 3 users actually seeing average download speeds of 13.2 Mbps, while our Indosat users were below the 10 Mbps threshold, as their average download speed was 9 Mbps. The resulting score of the merged Indosat-3 would have hit the 10 Mbps threshold in Java, Kalimantan and Sulawesi, and reached 9.5 Mbps in Sumatra. However, in all four regions that combined score would have fallen short of the regional averages by between 0.6 Mbps and 1 Mbps. 

 

Opensignal’s analysis shows that Indosat and 3 shine in different mobile experience categories. In our estimated Indosat-3 combined scores it’s not only the users of one operator who would have benefitted from accessing the other network. Both groups would have seen an improvement in some of our mobile experience categories, while a decrease in others. However, our estimates also show that the combined scores would have fallen short of the national and regional averages across many metrics. This suggests that, while the merger represents an opportunity for the two Indonesian operators to strengthen their competitive position in the market, it will very likely take time before users see benefits to their mobile experience as the combined entity integrates their networks, creates synergies, and potentially challenges market leader Telkomsel.