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Imagine trying to expand a mobile phone network across 17,000 islands that spans an area 5,100 km wide. That\u2019s the hurdle Indonesia and its telecoms companies need to overcome in expanding internet access<\/a> to the country\u2019s over 270 million people. Despite investing<\/a> hundreds of millions of dollars in expanding access, the country still has a digital divide, particularly for those living in remote areas.<\/p>\n Twenty-two percent of Indonesians still don\u2019t have internet access, Indonesia communications minister Budi Arie Setiadi said in October. Most unconnected Indonesians live in non-metro urban areas, according to the World Bank<\/a>.\u00a0<\/p>\n But that\u2019s changing fast. Vikram Sinha, CEO of Indosat Ooredoo Hutchinson, the country\u2019s second-largest telecoms company, estimates that 21 million Indonesians will go online between now and 2027. To compare, that\u2019s close to the population of the U.S. state of Florida or the country of Sri Lanka\u2014and equal about 8% of Indonesia\u2019s entire population.\u00a0<\/p>\n \u201cWe have to make sure we tap that opportunity,\u201d Sinha said.<\/p>\n IOH spent around $829 million on capital expenditure last year, much of it towards developing its cellular business and expanding network coverage to rural and remote areas. The company is also expanding its wireless coverage to Nusantara, the still-under-construction new capital on the island of Borneo.<\/p>\n Sinha hopes that being the service provider for rural Indonesians will create opportunities for sticky revenue. Providing data access in turn provides connection to other digital services; that means more time spent on phones, and in turn higher data consumption\u2014and thus revenue per user.<\/p>\n Indonesians spend about five hours a day on their phones, Sinha says, but still lags other Southeast Asian countries like Thailand and the Philippines.<\/p>\n Sinha doesn\u2019t want IOH to remain just a telecoms company. The company is making a long-term play to become a tech company, generating $15 million last year from selling data on user habits to banks and credit rating firms. The company is also expanding to services like AI and cloud computing.\u00a0<\/p>\n In 2021, Qatari telco Ooredoo and Hong Kong\u2019s CK Hutchinson Holdings agreed<\/a> to merge their Indonesian businesses to form Indosat Ooredoo Hutchinson, creating the country\u2019s second-largest telecoms provider. IOH has about 100 million subscribers, behind Telkomsel\u2019s 156 million.\u00a0<\/p>\n The newly-merged entity tapped Sinha to be the CEO of the newly-merged entity, following his tenure as COO of Ooredoo\u2019s Indonesian telecoms company. He spent time at Bharti Airtel in India and Airtel Seychelles in the Seychelles before moving to Ooredoo.\u00a0<\/p>\n Credit rating agencies were not confident about the success of the merger. \u201cFitch put us on a negative watch list based on the historical data of other mergers,\u201d Sinha remembers. The ratings agency suggested that Ooredoo might lower its support for the merged entity. But \u201cwithin one year, they put us into stable<\/a>,\u201d Sinha says.<\/p>\n Fitch has since revised<\/a> IOH\u2019s outlook to positive, listing improvements in margins and average revenue per user.<\/p>\n IOH\u2019s full-year revenue rose 10% in 2023 to reach $3.3 billion. Data traffic also increased by 14.8% last year, and the company increased its 4G transceiver stations by 30.7%.<\/p>\n Fortune is hosting the inaugural\u00a0Fortune Innovation Forum<\/a>\u00a0in Hong Kong on March 27\u201328. Experts, investors, and leaders of the world\u2019s largest companies<\/em>\u00a0will come together to discuss \u201cNew Strategies for Growth,\u201d or how companies can best seize opportunities in a fast-changing world.<\/em><\/p>\n<\/div>\n\n