Indosat Ooredoo Hutchison chief aims to drive Indonesia’s digital economy

Indosat Ooredoo Hutchison (IOH) expressed bullishness post-merger with ambitions to aid the southeast Asian nation in transforming into a “digital powerhouse”, but admitted the operator has work to do in tackling “toxic” practices to support nationwide digital transformation.

Indosat Ooredoo Hutchison president director and CEO Vikram Sinha said in a media briefing that IOH’s strategy will not focus on price but on improving customer experience, stating Indonesians demand quality services particularly after the global health crisis spotlighted the urgent need for connectivity in society.

Sinha said the operator has two key challenges since completing its merger in January, they are to improve business practices and in turn build up customer trust.

“We want to be a purpose-driven organisation by empowering and connecting communities, this really helped us galvanise the organisation. Secondly, we have to tackle the experience beast. I’ve been in the industry for 20 years, I have to acknowledge that we have not been good at building customer trust,” said Sinha.

Sinha said the company will work on being more “transparent” to gain customer loyalty, as well as shedding practices such as “unnecessary roaming charges” and contract auto-renewals.

“It took us a long time to realise it was very toxic. I think we are very focused on ensuring that we build trust and that we give our customers a marvellous experience. This has been our driving force in the last eight months and we had we are still on that journey,” said Sinha.

Indonesia’s potential

IOH has a vital role in the development of Indonesia said the CEO, the nation has the fourth largest population in the world with 275 million people. It is expected to be the 10th largest economy globally by GDP in the coming years.

Indonesia is predicted to grow to be the fourth largest economy by 2045, according to the International Monetary Fund. Its gross merchandise value, a measure of the digital economy, was US$70 billion in 2021 a 49% surge year-on-year and is forecast to grow 20% to US$146 million by 2025, according to Google’s e-Conomy 2021 report.

“There is no doubt that Indonesia will be the digital powerhouse of Southeast Asia. With the government policy changes, especially the omnibus law coming in, there is a forward-looking approach from the government, I feel Indonesia’s digital economy will be one of the best in the world,” said Sinha.

The omnibus law was passed by the Indonesian parliament in October 2020 which aims to create jobs in the country. The law also enabled operators to share infrastructure and spectrum, a move that made the merger between Indosat Ooredoo and Hutchison Tri possible, said Sinha.

IOH has a subscriber base of around 100 million making it the second largest player in the market. The company now has “real-scale” with 50,000 base stations at its disposal to take on market rivals. IOH has completed 50% of its integration process since merging in January, noted Sinha.

Connecting the unconnected

Sinha also noted there is still a challenge in connecting all Indonesians due to it being an archipelagic state consisting of more than17,000 islands. Sinha said the company is exploring the use of low-earth orbit satellites to connect underserved locations. The chief executive also noted around 70% of Indonesians are currently using connectivity services, but more “collaborative work” is needed to tap into the rest of the population.

To attract unconnected people education is imperative, Sinha said there is still a need for an “offline approach” to attract consumers by opening dialogue through its 200,000-retail presence.

“Connecting the next 15% of the unconnected requires a lot of collaborative work, where you have to first make sure there is a 4G network available, then you have to work in terms of making people feel comfortable [with new technology]. That’s the journey which we are going through, it’s not easy,” said Sinha.

The company has a scholarship programme called IDCamp which educates young Indonesians to develop skillsets to become developers/programmers. The scheme has produced around 180,000 certified coders to date.   

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