The Indonesian telecom industry has witnessed significant changes over the years, shaping its competitive landscape, and the recent merger of Indosat Ooredoo and Hutchison 3 in January 2022 is no exception. This merger concluded with the creation of Indosat Ooredoo Hutchison (IOH), which now stands as the second largest mobile network operator in Indonesia by mobile market share, behind Telkomsel. With an improved market position, IOH aims to provide enhanced services and a seamless mobile network experience for its users while competing more effectively in the market. The merger is set to accelerate digitalization and generate significant cost savings for network enhancements.
Since the merger, IOH has been working on integrating the networks of 3 and Indosat while they continue to operate as separate brands. According to a recent press release, IOH has successfully completed its network integration using Multi-Operator Core Network (MOCN) technology in over 46,000 sites across Indonesia. Additionally, based on the last financial results from IOH, cellular services are already generating significantly increased revenues attributable to an increase in data and interconnection revenue. But amid all this, one key question lingers — how does all this impact the mobile network experience for IOH users on 3 and Indosat?
Opensignal data reveals that IOH users on both networks have experienced a positive impact on download speeds and time they spend connected to a 4G or better connection since the merger. There has been a significant decrease in the proportion of users experiencing low download speeds and low Time on 4G/5G, accompanied by an increase among those experiencing faster download speeds and higher Time on 4G/5G. And these improvements are more pronounced for users on 3 compared to Indosat.
Analyzing average download speeds, our findings show that smartphone users on both IOH brands have seen their download speeds improve following the merger. However, users on 3 appear to be reaping greater benefits, as our findings show that the proportion of 3 users reporting low download speeds has declined considerably, and there has been substantial growth in the number of users accessing high-download speed tiers compared to Indosat.
Based on Opensignal data in Q1’2022, 17.4% of our 3 users and 14.6% of our Indosat users experienced speeds below 5Mbps, which fell to 9.6-10% across both brands in Q1’2023. Similarly, the proportion of IOH users with download speeds between 5-10Mbps has also declined on both networks — from 30.4% to 24.9% on 3, and 26.3% to 24.5% on Indosat. At the same time, the proportion of users with download speeds between 10-15Mbps dipped by 0.9 percentage points on 3, while there was an increase of 2.6 percentage points on Indosat.
Looking at higher speed categories, from Q1’2022 to Q1’2023, the proportion of users experiencing average download speeds between 15 and 20Mbps grew by 1.6 percentage points on Indosat and 1.9 percentage points on 3, while those experiencing speeds between 20 and 25Mbps grew by 0.9 and 1.7 percentage points, respectively. However, the impact on 3's user experience is more substantial for average download speeds above 25Mbps. The proportion of 3 users experiencing speeds over 25Mbps has tripled, from 5.1% to 15.3%, compared to a 1.6 percentage point increase on Indosat.
Analyzing the mobile network experience in regions within Jawa Island, we observe a significant decline in the proportion of our users in the lowest download speed tier (<5Mbps) across all provinces, and those experiencing higher speeds have improved across most provinces, with more notable improvements on those who were on 3 pre-merger, compared to Indosat. Jawa Timur stands out with the most significant decrease in 3 users experiencing speeds below 5Mbps (10.8 percentage points) and the largest growth in users experiencing speeds above 25Mbps (16.7 percentage points). However, in Yogyakarta and Jawa Tengah, there has been a decline in the proportion of Indosat users with average download speeds above 25Mbps — 2.1-3.1 percentage points, respectively.
These results highlight substantial improvements in download speeds for both IOH brands, most notably for our 3 users.
Shifting our focus to the proportion of time users spend connected to 4G or a better connection — Time on 4G/5G — both IOH pre-merger brands have witnessed substantial improvements, with users reporting a higher percentage of time with an active 4G or better signal. There has been an increase in the proportion of users reporting Time on 4G/5G above 90%, accompanied by a decrease in the proportion reporting availability below 90%. In Q1'2022, 81.9% of Indosat users and 77.7% of 3 users reported Time on 4G/5G above 90%. By Q1'2023, these figures increased by 5 and 11.7 percentage points, respectively. Consequently, 89.3% of 3 users observed Time on 4G/5G score above 90%, surpassing Indosat's figure of 86.9% for the same score range by 2.4 percentage points.
Examining Time on 4G/5G within Jawa Island, the proportion of users spending less time connected to 4G or better services (0-50% and 50-90%) has declined, while the proportion spending more than 90% time connected to 4G or better services has improved across all six provinces for both 3 and Indosat, with the exception of Banten. For 3, we saw the most significant growth in the proportion of users with Time on 4G/5G above 90% in Jawa Timur, increasing by an impressive 16.3 percentage points — from 73.3% in Q1’2022 to 89.6% in Q1’2023. Meanwhile, in the case of Indosat, Yogyakarta sees the biggest growth in the proportion of users with a Time on 4G/5G score above 90%. — a 11.4 percentage point increase.
In conclusion, the merger between 3 and Indosat has led to a significant improvement in the way their users experience download speeds and time spent accessing faster 4G/5G networks. While IOH users are experiencing positive changes, it is evident that users on 3 have gained the most significant benefits. Overall, these findings demonstrate that the IOH merger has had a positive impact on users’ mobile network experience, which will continue to directly contribute to its improved commercial performance.
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