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ASEAN Market Watch: Thai 4G And Indonesian Economic Growth

By Dezan Shira & Associates
Posted: 11th January 2016 10:14
Thailand: Mobile Network Providers Set to Launch 4G Services
Major mobile service providers plan to launch 4G (fourth generation high-speed data) services in early 2016. The 4G services will service the expanding mobile user base in the country. The launch of 4G services has the potential to increase the volume of business for information and communication technology (ICT) – related businesses. E-commerce companies in particular can expect a boost in revenues and higher growth. In addition, the higher internet speed may also have a spur economic growth. For instance, some independent studies suggest that doubling internet speeds can potentially increase the GDP by 0.3 percent in some scenarios.
The launch of the 4G services come after an extremely successful 2015 for mobile companies, who increased their revenues this year. Thailand currently has 110 million mobile subscribers, which is projected to rise to 150 million in 2016. Around 40 million are mobile internet users and the 4G service will cater to this segment of the market, which is valued at around US $8.3 billion. The 4G service will also target over 500,000 e-commerce companies, which will be the primary corporate users of the service.
Indonesia: Stimulus Packages Expected to Spur Industrial Growth in 2016
The Indonesian government has issued seven economic policy packages since September to boost non-oil and gas industrial growth in the country. These include the simplification of export-import regulations and electricity price cuts, in addition to the launch of key investment projects in the past two years. As a result, total investment in the non-oil and gas industry increased from US $13.5 billion last year to US $13.6 billion this year.
The government is hopeful about the impact of the recovery of the US economy – the U.S. is one of Indonesia’s largest markets and key to expanding the demand for commodities.  Local analysts forecast that the domestic market will grow in 2016 as stronger consumer purchasing power and the national health insurance program (JKN) is projected to accelerate growth in the following sectors – pharmaceuticals, chemicals and traditional medicine (8.5 to 8.7 percent growth), metal and electronics (8 to 8.2 percent) and food and beverages (7.4 to 7.8 percent).
The stimulus packages and investments come as data from the industry ministry showed that the growth of Indonesia’s non-oil and gas industry had dropped down to 5.2 percent in the third quarter of 2015 due to the global commodity slowdown. Forecasts by the World Bank continue to predict a weak economic growth for Indonesia at 4.7 percent this year, which would slightly increase to 5.3 percent next year.
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