Telco - 2G BTS in decline

Indonesia's largest MNOs, Telekomunikasi Indonesia (TLKM), Indosat Hutchison Ooreedoo (ISAT) and XL Axiata (EXCL) have seen 2G BTS decline compared to last year's. TLKM's 2G BTS currently stands at c.49,000, while ISAT's 2G BTS is at amounting c.46,000. However, the amount of 2G BTS of EXCL is over 53,000 or the largest among the three. (Source : Bisnis Indonesia) Comment : Despite 2G BTS decline and an uptrend in digitalization, the number of 2G BTS remains relatively significant with contribution of 19-36% of total number of BTS. This may indicate how legacy service still plays an important role in communications, particularly in less digitized regions and some population. In addition, 2G technology is often being treated as "temporary solution" during 3G phase out to bridge existing demand for legacy services due to unsupported devices and lack of 4G coverage. This may explain why EXCL's 2G BTS number especially increased compared to two years prior although the proportion of 4G users has reached 90%. On the other hand, digital divide and delayed modernization in devices may prompt MNOs to carefully map out 2G BTS presence in order to play balancing act between service and costs.