Rural mobile consumers are often typecast as low spending. Yet Indonesian operator Telkomsel has found that its rural customers expend more than expected, making the effort of providing coverage across difficult terrain well worthwhile.

When it comes to rolling out rural communications, Indonesia presents physical challenges far beyond those of most other countries. The sheer geographical inaccessibility of remote parts of the nation stretching 8,000 km across more than 17,000 islands makes Indonesia a tough test for extending mobile coverage to rural consumers.

And so it is for Telkomsel, Indonesia’s leading mobile operator with about 52 million subscribers. As part of its business growth strategy, Telkomsel is expanding into areas with no prior mobile communications coverage. Its expansion since 2002 has targeted the islands of Kalimantan, Maluku, Papua and Sulawesi, collectively known as Area IV.

“Area IV is especially challenging. We have to hire helicopters to bring installation engineers and equipment to remote locations. We also have to install generator sets to power base stations and use satellite transmission links, which together account for about 90 percent of our operational costs in rural areas,” explains Mr. Hendri Mulya Sjam, president of Marketing and Customer Relationship Management for Telkomsel.

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