Figure 1. Traffic data during WFH in Indonesia [Bakti Kominfo, 2020]
Based on Figure 1, when the implementation of WFH is running in Indonesia, data traffic has increase significantly.
From BAKTI KOMINFO resources, we know that internet access has raise sharply until 7.3GB/day or 23%, during the government policy to enforce WFH and according to statistical data from July 2020, there are 4,57 billions of people are active as active internet users (Statista, 2020a), which is 59% of the total population (Dwivedi, 2020).
People use internet data daily for their work, looking for information, accessing social media etc. In other words, as an Operator, it is a good place to take advantage of data packages, because everyone has access to the internet and uses their data packages.
However, in the middle of the pandemic we are fighting, The Operators must think about their marketing strategies for taking the many data packages used by their customers. So, this paper will discuss the marketing strategies that will be used by operators in dealing with this pandemic.
2. METHOD
2.1 ANNUAL REPORT ANALYSIS
Annual reports are very useful as decision makers, they are core values to help investors make economic decisions (Luo, 2018), so this paper takes the annual report from Telecommunication Companies in Indonesia. Based on the company’s 2019 annual report, we can find out the market share of telecommunications companies in Indonesia, market share is the number of subscribers of each operator, market share data is divided into 5 companies, they are : Telkomsel 49.22%, Indosat 17.06%, XL Axiata 16, 1%, Hutchison Indonesia (3) 10.64%, Smartfren 6.76%.
Figure 2. Market Share of Indonesian Telecommunication Company (Annual Report 2019)
Based on the market, we can know that the Telecommunication Companies still have chance to get big opportunities, then the businessmen can get revenue for each Operator.
According to the financial analysis for three Big Operator Companies: Telkomsel, Indosat, and XL, which is already represent 82.59% of the total market share of Telecommunications Companies, so they can represent the Telecommunications market as a whole (Heppy, 2018).
Figure 3. Revenue of Indonesian Telecommunication Companies (Telkomsel, XL and Indosat) (Annual Report 2015 – Q2 2020)
Even though the traffic data increases based on figure 1, the purchasing power of customers has also decreased due to the impact of job reduction [Siswarini, 2020]. This is reinforced by the revenue obtained by the operator.
Telecommunication company, Telkomsel has not issued a Financial Report in 2020 (during pandemic of corona), while for PT. XL Revenue has not reached the previous year’s revenue that it has decreased, because of the increasing traffic, PT XL has also increased their BTS number to 18-24 thousand to support this WFH [Darmayusa, 2020], then PT Indosat revenue continues decreased since 2017 until now, they are still unable to recover revenue due to the impact of COVID. This is a dilemma for telecommunication operators in Indonesia. This dilemma causes because data packages has increase significantly but not followed by increased revenue.
2.2 MARKETING CONCEPT
Marketing is the basis of the philosophy and ideology of the marketing concept which identifies and responds to consumer needs and wants of targets markets better than competitors (Kotler et al. 2019). More progressive organization have espoused variations of social marketing concept, where the company (this case, the operator) balances the short-run desires of the customer with long-term customer welfare (Kotler and Zaltman 1971; Kotler et al. 2019)
Since this pandemic entered Indonesia, several company regulations have changed which previously we had to come to the office and work from the office, now it has changed to Work From Home (WFH) and Education has changed to School From Home (SCH), this is what causes Traffic data increases according figure 1. In other words, communication is actually limited place, before covid, communication occurred directly, but we communicate only via media such as Skype, WhatsApp and Zoom now. Nowadays, we can purchase any item from offline to online (He. Hongwei and Harris.Lloyd, 2020), so that we can say now is the right moment in social media marketing.
3. RESULTS AND DISCUSSION 3.1 MARKETING STRATEGY
Changes in the marketing environment, before the pandemic, during the pandemic and after the pandemic, have forcing telecommunication companies to always innovate new things so that they will get revenue higher than before. While innovative commentators lauded the need for strategic agility to create new markets that reach
new consumers and customers, namely the blue ocean strategy (Kim and Mauborgne, 2004). The blue ocean strategy, which is more suitable for companies that have large capital such as PT Telkomsel, by providing new innovations in the form of new technology, namely 5G which can carry data with a large throughput capacity of 10.77 Gbps-11.8 Gbps (Situmorang. Anna C, 2019).
The second strategy is the cost leadership strategy, where a popular idea from many handbooks is that companies manage to maintain competitive advantages in the price structure by offering the lowest cost to customers (Coeurderoy, 2004). For this strategy, it can be used with a pulse bundling system with some content from the operator itself or if it is building new technology, it can be bundled with a 5G application. With the price offered is lower than competitors, the volume in sales will increase, so that the operators themselves maintain their advantage in the sales structure. Therefore, companies get a higher economy than their competitors by increasing the cost leadership strategy (Grant, 1998; Hitt et al., 2001). Another solution could be in the form of breakthrough technology. With the existing technology, covering all populations as the connectivity gap will be very expensive.
A new approach like Open Radio Access Network (Open RAN) could be the alternative to make infrastructure more affordable. Most of the CAPEX required to deploy mobile broadband is associated with the RAN section.
Any reduction in the RAN cost will meaningfully benefit the operators.
Economics of RAN sharing benefits can be divided into three sharing stages include rollout phase, steady state, modernization/obsolescence. Rollout phase is where bulk (assumption >80%) of sites and nodes to be deployed.
CAPEX synergy potential is high for passive sharing (site build, mast, rack/ancillary) and medium for active sharing (microwave link/optical fiber, electronics, spectrum, resources). OPEX synergy potential is high by OPEX prevention method in site lease, non-telco services, telco services, energy, and resources. Restructuring cost can be low if little legacy infrastructure is present. Write-off can be relative low exposure if little legacy infrastructure is present. Steady state is where 80% of coverage and sites deployed. Mainly capacity additions and coverage maintenance. CAPEX synergy potential is high for passive sharing and low for active sharing. OPEX synergy potential is high by OPEX saving if absolute number of site locations are reduced. Primarily OPEX prevention in case of site number expansion. Cost restructuring is high by termination (site lease, site restoration, service, contracts, personal cost) and other (JV overhead, legal, etc). As most of the network has been deployed at this stage the write-off exposure can be significant even if equipment can be re-used. Modernization/obsolescence is a sharing stage with active element / node replacement, technology migration, and site consolidation. CAPEX synergy potential is high for passive sharing and medium/substantial for active sharing. OPEX synergy potential is high that can create OPEX saving if absolute number of site locations are reduced.Primarily OPEX prevention in case of site number expansion. Restructure cost can be significant. Although contract termination can be less costly due to longer operational period. If decision for network sharing is taken in the renewal / obsolescence phase write-off exposure can be relative light both for equipment and site-build.
4. CONCLUSION
The current pandemic in Indonesia has an effect on the value of profits earned by cellular operators. This is shown in the graph of the annual report on the 2 largest cellular operators in Indonesia whose curves tend to decline.
Some of the things that caused the decline in revenue were the existence of some free quota assistance from the government during the pandemic. To deal with the decline in revenue, it can be suggested that several strategies need to be implemented, such as: blue ocean strategy (proposed new technology 5G) and cost of leadership (Bundling pulse with 5G application and Open RAN or RAN Sharing).
ACKNOWLEDGMENT
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