Indosat Captures MNC Play Customers, Operator Pursues New Sources of Revenue in FTTH

Indosat Ooredoo Hutchison (IOH) has just completed the acquisition of 300 thousand customer assets belonging to PT MNC Kabel Mediacom (MNC Play). His party ensures that the transition of providing MNC Play internet services to Indosat, including subscription contracts and customer data, has officially moved to Indosat.

"By taking over MNC Play customers, Indosat hopes to increase revenue from the Fiber-to-the-Home (FTTH) business which is part of the Multimedia, Data Communications and Internet (MIDI) segment. As of nine months 2023, this segment contributes around ~ 12.1% of Indosat's total revenue," wrote Indosat SVP Head of Corporate Communications Steve Saerang, contacted separately by DailySocial.id.

Steve said the FMC business is a growth opportunity for the telecommunications sector in the future. This takeover step aims to strengthen Indosat's penetration in the FTTH business line. Moreover, the combination of MNC Play's IPTV services will strengthen Indosat's position in offering services broadband. 

According to the Executive Chairman of MNC Group Hary Tanoesoedibjo had revealed that there were two transactions agreed upon for this acquisition. First, Indosat Ooredoo acquired MNC Play customers for fiber optic based networks. The second transaction is network acquisition Fiber-to-the-Home (FTTH) belongs to MNC Play by Asianet (Lightstorm Group Company). Meanwhile, IPTV customers are still under MNC Play.

Indosat will increase Fiber-to-the-home (FTTH) capacity via brand Indosat HiFi. Meanwhile, Asianet, which manages MNC Play's network, will also automatically have a fiber network of more than 15.000 kilometers and more than 1,5 million home pass in ten cities in Indonesia.

It also claims that the acquisition makes Indosat one of the FTTH operators with neutral technology in Indonesia, by collaborating with Asianet as its infrastructure partner.

"We ensure a smooth transition and continue to provide the best service for all customers. Our team, business partners and clients work hand in hand with MNC Play and offer the best video content services, both local and international, to IPTV customers in Indonesia," said the President Director of MNC Play Ade Tjendra in his official broadcast.

Boost FMC with inorganic strategies

the competitors, Telkomsel and XL Axiata have previously carried out similar corporate actions with inorganic strategies to boost FMC's business. This action is the next stage to anticipate competition for Fixed-Mobile Convergence (FMC) in Indonesia.

XL Axiata acquired LinkNet which was previously controlled by the Lippo Group tycoon. Service broadband based fiber optics XL's properties currently consist of XL Home and XL Satu Fiber (FMC). Per November 2023, XL said that its FMC service penetration had reached 69% in Indonesia.

While, Telkomsel merged with IndiHome which was originally a business unit broadband Telkom. This fusion produces Telkomsel One as the new face of FMC services. It should be noted, IndiHome migration includes internet services, voice bundling, IPTV, OTT and digital services.

As is known, the telecommunications industry has experienced a saturation condition, where high mobile penetration makes it difficult for operators to acquire new users and increase ARPU. The number of cellular users in Indonesia has exceeded 340 million.

According to an analysis by a consulting firm Oliver Wyman, convergence between mobile networks and fixed broadband could be a new way for operators to boost ARPU, pushing down rates churn rate, and maximize customer retention rates.

Report Mason Research in 2021 recorded penetration fixed broadband in Indonesia it has only reached 14%, the lowest among Southeast Asian countries, such as Singapore (87%), Malaysia (40%), and the Philippines (36%).