Q&A: XL Axiata wants to be the pay-TV player Indonesia needs right now

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Last month, Indonesian operator XL Axiata announced plans to diversify its business with an ambitious triple-play service covering mobile/fixed-line broadband and pay-TV. XL Axiata aims to spend $500 million over the next five years to that end, with the pay-TV service slated to start sometime in the second quarter of this year.

Disruptive.Asia editor-in-chief John Tanner managed to catch up with Dave Ulmer, head of XL Home, Marketing & Entertainment at XL Axiata, on the sidelines of the CASBAA OTT Summit in Singapore this week to talk about the attraction of triple-play and what Indonesian customers don’t want in a pay-TV service.

Dave Ulmer, head of XL Home, Marketing & Entertainment at XL Axiata
Dave Ulmer, head of XL Home, Marketing & Entertainment at XL Axiata

Disruptive.Asia: What’s the state of play in Indonesia’s video market in right now?

Dave Ulmer: The one overriding statistic regarding the state of video entertainment in Indonesia is that pay-TV has failed. Paid TV services have the lowest penetration rate of any country in Asia and are simply not growing. The whole premise of paying hundreds of thousands of rupiah a month for hundreds of channels you don’t watch just doesn’t resonate with Indonesian consumers. We believe there’s a tremendous opportunity to provide consumers with the choice to pay for what they wish, choose the content that they desire, and the services that best match their tastes and needs.

Which brings us to XL Axiata’s plan to launch a triple-play service in the pay-TV space – what’s your strategy to accomplish that?

Triple plays are the largest advantage for telcos worldwide, and a huge attraction to consumers. A triple play is far more than simply charging less for bundled services. For a movie and TV fanatic, it puts control back in the consumer’s hands to watch the content they want, when and where they wish. A well-integrated service allows a consumer to pause there and watch here, start a movie on the train on the way home and finish it on their big screen in the living room.

Oh. And one more big advantage for consumers in a telco’s bundle of services is the inherent integration of Indonesia’s most used currency, your pulsa, into all screens – carrier billing.

Why go for the full triple play, though? In a country where mobile is the prevalent internet experience, is that not enough to deliver video content to consumers?

It’s a matter of cost, convenience, and choice. Consumers have time and again told us that they want to watch what they want when they want it. A smartphone gives you anywhere-anytime access to the services you want, but at a higher on-demand data cost. And watching the Avengers on a big screen at home is a far more immersive experience, without quotas or per minute charges.

How do you plan to differentiate yourself – not only from other operators but also the OTT players?

If I told you, you’d have to promise not to tell. We’ll be launching an innovative and disruptive service offering later this year, and will leave it to our consumers to decide just how attractive it is vs the existing “me too” services.

As you’ll be coming in a little late to the pay-TV game, does that give you a leapfrog advantage in terms of current or future technological innovations you can leverage?

In terms of infrastructure, XL has been in this market long before our competition. We have one of the nations’s strongest, fastest, and most distributed fiber optic backbones embedded across Indonesia. But you’re right, we’ve yet to launch any form of home video service, and in that regard I can only say that we’ve sure learned a lot in researching this market about what consumers don’t want. I believe we have a clear vision of what they do want instead.

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