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Margin squeeze affects Indonesia's mobile momentum

Price pressures hit world's sixth-largest mobile market despite strong growth



Strong mobile subscriber growth in Indonesia is set to continue for the foreseeable future and - as Telkomsel admitted recently - this will be vital for offsetting declining prices. High-speed networks and data services are still in their infancy but are already becoming a key contributor to profitability and margins. Indosat, for example, said that by the end of the second-quarter, revenue from non- SMS data services already accounted for 5% of ARPU. To date, capital expenditure at most Indonesian operators is concentrated on expanding network capacity to meet the growing subscriber base, but high-speed network build- out may be the key to sustaining profitability in the longer-term.



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