Faisal Maliki Baskoro
The amount of money Indonesians spend over the Internet is expected to triple in the next five years thanks to the continued growth in the number of smartphone users, a report shows.
Deloitte Access Economics, an Australian-based provider of economic advisory services, said in the report that Indonesia’s Internet expenditures would surge to Rp 324 trillion ($35.6 billion) in 2016 from an estimated Rp 116 trillion this year.
It said the Internet’s contribution to total gross domestic product would grow to 2.5 percent in 2016 from 1.6 percent this year.
According to the Jakarta Globe’s calculations, Deloitte Access expects Indonesia’s GDP to grow to Rp 12,960 trillion in 2016 from Rp 7,250 trillion this year.
“The growth of the Internet in Indonesia has been driven by sharp falls in mobile phone and data service prices,” Ric Simes, a director at Deloitte Access Economics, said on Tuesday. “This has allowed widespread use of social networking, rising on the back of already extensive use of instant messaging.”
Internet expenditures measure the amount of money spent by consumers, including households, businesses and government, on Internet-related goods and services.
According to the Ministry of Communication and Information, there were 45 million Internet users in Indonesia as of the middle of this year, up from 40 million in 2010 and 16 million in 2005. Growth has largely been fueled by smartphone users.
“Social networking is what has distinguished Indonesia’s Internet history,” Simes said. “Of the 45 million Internet users, 40 million of them use Facebook, the second highest number in the world.”
He said, however, that there were major challenges to the continued growth of Internet penetration. These include providing the necessary infrastructure and introducing policies that foster the growth of local start-ups and encourage investments.
Aulia Masna, a columnist at Daily Social, a news site focusing on Indonesian start-ups and tech-related innovations, said the growth in Internet penetration has helped start-ups flourish.
“From 2008 to early 2011, there were around 500 start-up ventures, and this year that number may grow by another 300 start-ups,” he said.