Communication Services

<h2 style="text-align: justify;"><span style="font-size: 12pt;"><span data-preserver-spaces="true">Q1. </span><span data-preserver-spaces="true">Could you</span><span data-preserver-spaces="true"> start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industr</span><span data-preserver-spaces="true">y?</span></span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">I have </span><span data-preserver-spaces="true">been involved</span><span data-preserver-spaces="true"> in IT and Telco market research, telco product management, including enterprise and consumer segments, and smartphone sales and solutions in both B2B and consumer markets for quite some time. I have a career in one of the leading market research agencies, the second-largest telco company in Indonesia, and the biggest Korean smartphone manufacturer.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">So,</span><span data-preserver-spaces="true"> I have a deep understanding of the smartphone market and its relationship with telcos. At the same time, I understand how to analyze relevant market data to create telco products that </span><span data-preserver-spaces="true">are in line</span><span data-preserver-spaces="true"> with consumer desires while increasing </span><span data-preserver-spaces="true">the market share of smartphone users</span><span data-preserver-spaces="true">.</span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-preserver-spaces="true">Q2. What are the major cost drivers in smartphone packages, and how are they managed?</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">In</span><span data-preserver-spaces="true"> creating a telco product package for smartphones</span><span data-preserver-spaces="true">, several cost components must be considered</span><span data-preserver-spaces="true">.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">First, of course, the network cost </span><span data-preserver-spaces="true">in relation to</span><span data-preserver-spaces="true"> the size of the package we will create. We may already be able to see this network cost as a fixed cost, so we have to calculate the projection of how many users will use the network and how much data will be used. </span><span data-preserver-spaces="true">This</span><span data-preserver-spaces="true"> applies if the network cost depends on the size of its use. Several telco companies apply this scheme.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Second, partnership costs. It is </span><span data-preserver-spaces="true">very</span><span data-preserver-spaces="true"> common</span><span data-preserver-spaces="true"> for telcos and smartphone manufacturers to include partner solutions or applications in packages. It is </span><span data-preserver-spaces="true">currently quite</span><span data-preserver-spaces="true"> common for high-end users to embed AI (artificial intelligence)- based applications. From both sides, there is usually an economic scheme for the revenue generated, which needs to be considered when creating a package.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Third, marketing costs. </span><span data-preserver-spaces="true">Whether </span><span data-preserver-spaces="true">it is</span><span data-preserver-spaces="true"> for a newly launched product or one </span><span data-preserver-spaces="true">that is</span><span data-preserver-spaces="true"> already on the market, costs related to advertising promotions and channel commissions will always arise.</span> <span data-preserver-spaces="true">This</span><span data-preserver-spaces="true"> is to boost sales or encourage the market to use our package.</span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-preserver-spaces="true">Q3. What methods do you use for demand forecasting?</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">The simplest way is to look at historical trends and </span><span data-preserver-spaces="true">then</span><span data-preserver-spaces="true"> project them into the next few years. </span><span data-preserver-spaces="true">You can use the </span><em><span data-preserver-spaces="true">moving average</span></em><span data-preserver-spaces="true"> method</span><span data-preserver-spaces="true">, for example, applied</span><span data-preserver-spaces="true"> to a period that is believed to be quite valid.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Challenge: The data used should be sales data for a quite similar package to the one we developed. So, it is necessary to periodically adjust to see the actual market trend.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">The next </span><span data-preserver-spaces="true">way</span><span data-preserver-spaces="true"> is to conduct a demand and supply analysis. Smartphone supply data, smartphone user data and network coverage are processed, then simulations and modeling are carried out </span><span data-preserver-spaces="true">by</span><span data-preserver-spaces="true"> including other related industry factors such as the development of OTT players and economic components, to obtain projection figures.</span><span data-preserver-spaces="true"> We can enter growth targets using the CAGR (Compounded Annual Growth Rate) method.</span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-preserver-spaces="true">Q4. Who are the main players in the smartphone package industry, and what market share or position does each represent?</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">Recorded smartphone users (Q1 2024 data) are around 230 million. There are currently four telco companies in Indonesia. The largest is a subsidiary of a state-owned enterprise, with a market share of around 50%. In second place is a telco company whose shares are mostly owned by a consortium from the Middle East, with a portion of around 26%. Then, the Southeast Asian consortium group has a portion of around 16%. Finally, there is a local private consortium company with a portion of around 8%.</span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-preserver-spaces="true">Q5. What is the go-to-market strategy for the industry?</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">First, determine the communication that suits the target market</span><span data-preserver-spaces="true">, either</span><span data-preserver-spaces="true"> through ATL (above the line) or BTL (below the line) </span><span data-preserver-spaces="true">so</span><span data-preserver-spaces="true"> that the message delivered is effectively received.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Second, use a sales channel that </span><span data-preserver-spaces="true">is accustomed</span><span data-preserver-spaces="true"> to selling similar packages. We usually call this a non-traditional channel. </span><span data-preserver-spaces="true">This</span><span data-preserver-spaces="true"> also includes smartphone sales outlets.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Third, prepare an attractive and competitive incentive scheme.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Of the three strategies, it would be </span><span data-preserver-spaces="true">very good</span><span data-preserver-spaces="true"> if </span><span data-preserver-spaces="true">each component was carried out</span><span data-preserver-spaces="true"> at a completely different point from competitors. </span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;"><span data-preserver-spaces="true">Q6. What are the best growth opportunities in&nbsp;the </span><span data-preserver-spaces="true">smart phone</span><span data-preserver-spaces="true"> package&nbsp;market, and why?</span></span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">If you look at the number of users, of course, the majority are in the low-end segment, but they usually do not produce great value because of their small usage.</span></p><p style="text-align: justify;"><span data-preserver-spaces="true">What needs to be focused on is mid-end smartphone users because, in general, users of this segment will maximize device usage. Psychologically, users of this segment are very enthusiastic about exploring new applications, which will ultimately maximize the potential revenue for the company.</span></p><p style="text-align: justify;">&nbsp;</p><h2 style="text-align: justify;"><span style="font-size: 12pt;" data-preserver-spaces="true">Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?</span></h2><p style="text-align: justify;"><span data-preserver-spaces="true">If you really want to manage the smartphone user market, you need to prepare for how far the company dares to invest in managing its ecosystem end-to-end. </span></p><p style="text-align: justify;"><span data-preserver-spaces="true">Starting from network capacity, partnership with mobile smartphone brands, mutually beneficial content, promotions, and excellent customer experience, smartphone users, in addition to actively exploring competitive offers, network stability, and content that supports activities, also demand reliable customer touchpoints.</span></p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p><p style="text-align: justify;">&nbsp;</p>