Strategy Telkomsel Through Mobile and Fixed Broadband Convergence

A few days ago, Telkomsel officially introduce Telkomsel One as the new face of merging services mobile broadband and IndiHome. This inauguration marks the first step for this state-owned operator to enter service fixed-mobile convergence (FMC).

FMC is a combination of telecommunication-based services mobile devices and fixed broadband. Before it was inaugurated, the IndiHome business unit merged into Telkomsel signed through a Conditional Separation Agreement (Conditional Spin-Off Agreement) on April 6, 2023.

As of the first quarter of 2023, IndiHome was recorded as having 9,5 million users, up 7% from the same period last year. IndiHome claims to have controlled 75,2% market share broadband in Indonesia.

This transfer marks the Telkom Group's strategy to manage the business. Telkom will focus on B2B services, while children Telkomsel fully manage telecommunications services for B2C. Meanwhile, integration Telkomsel and IndiHome includes service management fixed broadband, fixed line, IPTV, and bundling other digital services.

In his statement at the time, Main Director Hendri Mulya Sjam revealed that FMC's move could strengthen its position Telkomsel As the leading digital telecommunication company in the country, this convergence can accelerate people's experience of enjoying equal digital services.

New acquisition strategy

The telecommunications industry is faced with the challenge of boosting business growth in line with cellular user penetration which has exceeded 100%. This makes room for new customer acquisition difficult.

The Capital IQ, Telkom and Kearney reports for 2021 state that the telecommunications industry, based on the revenue of the top 30 global telecommunications companies in the 2011-2021 period, only grew by an average of 2%.

Although the cellular market is already saturated, according to analysis McKinsey Oxford Economics, there are new revenue opportunities that can be created through the convergence of telecommunication services given the penetration fixed broadband in Indonesia only 14%.

Please note, customer Telkomsel decreased significantly by 20 million to 156 million in 2022, from the previous year's position of 175 million. His party said that the depreciation was a 'clean-up' effort. Telkomsel to weed out passive customers who don't contribute to its business.

churn rate

Meanwhile, in reports Oliver Wyman's analysis, mobile convergence and fixed broadband is expected to be a powerful weapon for telecommunications operators to maximize customer retention, increase ARPU, reduce the rate of customer switching to competitors (churn rate), to gain new market share.

On the operational side, convergence allows operators to unify all processes related to customer service, from marketing, sales, activation, to customer care. Likewise integration in back end.

This report states that users of convergence services show a decrease in levels churn rate up to 50% compared to non-converged users. Service operator FMC in France is noted to have achieved the highest mobile penetration of over 60% with services fixed broadband.