Indonesia’s largest mobile operator Telkomsel widened its lead on rivals last year, adding 12 million mobile connections to take its total to 152 million, and in Q1 also became the country’s 4G leader.

Its closest competitor, Indosat, with a 20 per cent share, had less than seven million new additions in 2015, giving it 69 million mobile connections. Axiata XL lost ten million subs and ended the year with 41 million users, pushing it to number four below Hutchison 3 Indonesia.

Telkomsel, which has a 45 per cent market share, also is planning to invest more in its network than rivals, according to Fitch Ratings. Its capex budget for 2016 is IDR13 trillion ($981 million), with 80 per cent earmarked for network rollouts, while Indosat and XL will each will spend less than IDR8 trillion.

Fitch said Telkomsel had more than 103,000 base stations at the end of 2015, with nearly 54,000 3G/4G sites, compared with Indosat and XL that have fewer than 56,000 total sites each.

Growing 4G footprint
That investment and wide coverage have enabled Telkomsel to launch LTE service in 100 cities and add about 1.3 million 4G users in Q1, giving it a total of 3.5 million and taking it past both Indosat and Axiata XL, which had three million and 3.4 million 4G connections respectively, according to GSMA Intelligence.

XL, which continued its financial rebound last quarter, said it had 3,286 4G sites in 36 major cities, while smaller rival Smartfren Telecom said it offers LTE service in 188 cities and has 1.5 million 4G users.

Telkomel’s parent company, state-owned Telkom Indonesia, reported revenue grew 16.6 per cent in Q1 to IDR27.5 trillion, its first double-digit increase in five years. Its net profit increased 20 per cent to IDR6.9 trillion.

Cellular data revenue expanded 53 per cent year-on-year to IDR6.3 trillion, while SMS revenue, surprisingly, rose 15 per cent to IDR3.96 trillion.

Fitch said that Telkomsel’s EBITDA margin will gradually decline, as less profitable data services replace traditional voice and short messaging services. It estimates that EBITDA margin will remain at a very healthy 54-55 per cent during 2016-17.