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With the advent of the third generation of cellular
technology (3G), the term "value added services", which used to refer
to all services beyond voice calls, may be in for a new definition.
The new technology literally allows the user to have a broadband
internet connection in the palm of his or her hand, offering an endless
list of services.
For cellular content providers, the technological revolution has opened
up new frontiers for innovation and growth.
Iqbal Farabi, head of the information technology division at the Young
Indonesian Businessmen's Association, said the content industry's
revenues of about Rp 200 billion in 2006 were expected to grow by 15
percent this year.
"In general, the revenue pie chart consists of 50 percent text-based
content, 30 percent incoming call ring tunes and the rest is internet
downloads," he said.
"Religious content still ranks as the biggest revenue contributor.
Nowadays, many users prefer seeing their preacher directly through
streaming video rather than just plain text. It gives them a stronger
emotional feeling," he said.
Iqbal said the share of text-based content was expected to decrease
this year as more content was being developed for 3G, such as games,
music and video downloads.
Izak Jenie, technology director at PT Jatis Piranti Solusindo, said his
company's revenue from its cellular content division alone could reach
more than Rp 3 billion per month and was expected to grow by 25 percent
this year.
"With 3G, the content race has just entered a new chapter. We need to
be more creative with our products," he said.
The company currently offers hundreds of products in music, video and
games, some locally made and some foreign. The company's products are
also distributed in Europe and Asia.
Recently, the company's mobile karaoke service won it an award from the
country's largest cellular operator, Telkomsel, as the most innovative
content provider.
Both Iqbal and Izak said the industry was threatened by the
irresponsible conduct of some players, including foreign companies,
which could jeopardize public trust in the industry.
"These players came in with a lot of capital and advertised their
products on television. The problem is, many users have complained that
it was easy for them to register for the services offered but almost
impossible to cancel the registration, which was supposed to be as easy
as sending a text message," Iqbal said.
The problem was confirmed by Post and Telecommunication Directorate
director general Basuki Yusuf Iskandar in Jakarta last week. He said
the government was preparing regulations amounting to a code of conduct
for the industry.
Another force in the industry, Joseph Lumban Gaol, CEO of PT Antar
Mitra Perkasa, agreed that government intervention was needed. However,
he suggested the regulations not be too limiting.
Joseph said 3G technology could help increase internet penetration in
the country, adding that registered users currently number only about 5
million of the total population.
"The future of this business is huge. As long as there is further
public education and investment in 3G services, the internet revolution
will happen through mobile technology," he said.
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