Broadband Barometer - Mandiri Sekuritas
Operators have selectively raised prices, likely in anticipation of higher network capacity utilization, as they engage in Government’s mobile internet subsidy program valid for Sep-Dec ‘20. Mobile cashback & top-up bonuses continue as affordability and customer retention become key focus. Stay OW.
What’s new in September 2020?
Government launched mobile internet subsidy program for education sector, targeting >60mn students and teachers across the nation. Backed with Rp7.2tn budget, the subsidy program will provide students 20GB-35GB monthly data allowance and teachers 42GB-50GB monthly data allowance for 4 months (Sep ’20-Dec ’20), implying a theoretical subsidy of ~Rp30k/month per person (details in Fig. 2). To note, the monthly data allowance comprises of 5GB of unrestricted allowance and 15GB-45GB of predesignated allowance (for educationrelated apps only). Meanwhile, operators selectively raised prices of some mobile data packages, likely in anticipation of higher network capacity utilization for education purposes. But, aside from maintaining cashback and top-up bonuses to retain customers, some operators also extend the life period of their prepaid subscriptions from typically 1 month to >1 month – a move that could slow churn but deteriorate ARPU. Product offering updates in Sep ’20 are listed below: Telkomsel (TSEL) tweaked its ‘Combo Sakti Unlimited’ line-ups, effectively pushing unit prices up from Rp3.3- 10.0/MB to Rp3.3-15.0/MB in Sep ’20 (see Fig. 3). Also, TSEL introduced additional Rp30k/month package (7GB basic quota inclusive) in the ‘Unlimited Max’ line-ups. XL Axiata raised ‘Xtra Lite’ prices by13.5%-37.5% MoM (Rp9.0k12.5k/month higher MoM).
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