People familiar to the matter claim that US multinational technology firm Google will reach a tax settlement with the Indonesian government. Authorities in Indonesia have become increasingly uncomfortable with multinational companies that generate profit from an Indonesian online audience but lack a permanent presence in Indonesia in the form of a foreign investment company. This applies to various social media platforms as well as Google that only has a representative office in Indonesia, while transactions and revenue (generated in Indonesia) are booked at Google Inc's Asia Pacific headquarters in Singapore.

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Indonesia Investments often reports about Indonesia's blossoming e-commerce industry (a lucrative sector for investors). Online retail is growing rapidly in Southeast Asia's largest economy because both Internet and smartphone penetration are rising sharply in Indonesia, while expanding per capita GDP boosts people's purchasing power. But what do Indonesia's consumers actually buy online? A new survey from Google Indonesia gives some more information.

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According to the Indonesian Internet Service Provider Association (or APJII) there are currently 132.7 million Internet users in Indonesia, or approximately 51.8 percent of the total Indonesian population. These figures, which are the result of a survey, are much higher compared to 2014 when APJII data show that there were 88 million Internet users in Indonesia. Meanwhile, APJII Chairman Jamalul Izza informed that about 70 percent of Indonesian Internet users use a mobile device to access the Internet.

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In June 2016 the "1,000 digital startup movement" was launched by Indonesia's Communication and Information Ministry in cooperation with KIBAR, the nation's technology startup ecosystem builder. This government-backed program targets to see 1,000 startups in the digital economy by the year 2020 with a combined valuation of USD $10 billion. Considering that digitalization has been a key trend around the globe (covering basically all aspects of life), Indonesian authorities want this sector to boom in Indonesia as well, which would also make the whole economy more efficient.

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According to a survey conducted by International Data Corporation (IDC), two brands controlled a combined 45 percent of the smartphone market in Indonesia in the second quarter of 2016. These two brands are Samsung (South Korea) and OPPO (China). On third position comes Asus (Taiwan), followed by the local Indonesian brand Advan and China's Lenovo. Data from IDC also show that smartphone sales in Indonesia grew 3.3 percent year-on-year (y/y) and 22 percent month-on-month (m/m) in Q2-2016. Unfortunately these data do not mention the exact sales volume.

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Google Inc. and Temasek Holdings Pte released joint research that signals Southeast Asia's digital economy (which includes e-commerce, online games, advertising and other economic activities related to the Internet) will surge to USD $200 billion by 2025. Indonesia's digital market will account for 40.5 percent - or USD $81 billion - of this total market. With an estimated USD $46 billion, Indonesia's e-commerce sector will contribute most to the total.

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The West section of Indonesia's Palapa Ring project is ready for construction according to the Indonesian Communication and Information Ministry. The majority of funds for the West Palapa Ring section - estimated to require IDR 1.28 trillion (approx. USD $97 million) in total - are ready to be disbursed. The Palapa Ring project, which consists of three sections (the West, Central and East sections), is one of Indonesia's priority infrastructure projects. It involves a huge undersea fiber-optic cable network that will offer faster broadband to the entire archipelago.

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Audit, assurance, tax & consulting services firm PricewaterhouseCoopers (PwC) estimates that the world population will number 7.4 billion by 2020. Nearly 52 percent of this population - 3.84 billion - is expected to be connected to the Internet through a smartphone or portable tablet with around half of this Internet audience expected to be able to access high-speed broadband (at least 30 Mbps). PwC added that most of these Internet users - some 92 percent - live outside the United States. Meanwhile, market research company eMarketer expects to see 4.1 billion Internet users by 2020, up from 3.21 billion in 2015.

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One of Indonesia's priority infrastructure projects in the 2016-2019 period is the Palapa Ring project. This project, involving an undersea fiber-optic cable network that stretches across 13,000 kilometers and an onshore network of nearly 22,000 kilometers, aims to provide fast broadband Internet to Indonesians in both the urban and rural areas. The project is the first government-to-business cooperation scheme within Indonesia's telecommunication sector that utilizes the so-called "availability payment method".

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Good news for smartphone manufacturers in Indonesia. Based on a survey conducted by Advan, MARS Research Specialist, and telecommunications expert Hasnul Suhaimi, the majority of Indonesian consumers replace their smartphone with a new one every two years, on average, as they want to own a newer model (with more attractive features and applications) or because they need to replace their damaged smartphone. Another - and obvious - conclusion of the survey was that Indonesian consumers want a high-quality smartphone at an affordable price.

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It is widely known that Indonesia’s digital economy has been expanding rapidly over the past 10-15 years (and the COVID-19 crisis, in fact, accelerated this development in a significant manner). In this article, we take a look at the rise of digital payments across Indonesia.

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Indonesia’s digital economy is very promising. Near the end of 2019, Google and Singaporean wealth fund Temasek revised their projection for Indonesia's Internet economy (upwards) to reach USD $133 billion, in total value, by 2025. This would be a big jump from the value of around USD $40 billion in 2019.

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Whenever you sit in a coffee shop or restaurant (warung) in Indonesia, enjoying a drink or a meal, you will probably notice that most of the Indonesians around you are in constant contact with their mobile phones (or smartphones), iPads, and laptops. Or, when you walk on the bustling urban streets, you will notice that many Indonesians are sitting or standing next to the road while using their smartphones.

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Indonesia, the world’s 16th-biggest economy, recently joined the “trillion-US dollar club” having a nominal gross domestic product (GDP) of USD $1.01 trillion. Meanwhile, the country’s annual economic growth has been going at a pace of around 5.0 percent over the past couple of years.

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It’s not only a question of being digital or not; it’s more about the level ofdigital transformation that you are willing to take.

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Three Indonesian telecommunication and network providers are considered to have great room for improving their corporate earnings in the second half of 2017. These companies are Telekomunikasi Indonesia, Indosat Ooredoo, and XL Axiata. Reason why these companies should experience a good performance in H2-2017 is Indonesia's "data consumption trend".

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Indonesians love the Internet and love sharing their daily experiences or thoughts with their online friends. Photo-sharing application Instagram draws a huge audience from Indonesia. Reportedly, more then 45 million active users log on to Instagram every month in Indonesia, implying a more than 100 percent year-on-year (y/y) growth pace compared to the number of Indonesian Instagrammers one year ago. What explains this growth? Indonesia's huge population as well as steadily rising Internet and Smartphone penetration.

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Although the amount remains a secret, the government of Indonesia and Alphabet's Google finally managed to reach an agreement on the tax settlement after a long dispute that started in mid-2016. The news was confirmed by Indonesian Finance Ministry Sri Mulyani Indrawati. The dispute started because Indonesian authorities felt the so-called "over-the-top content" giants, referring to those companies that deliver content through Internet, deliberately did not set up permanent establishments in Indonesia in order to avoid taxes. Besides Google, other examples are Yahoo, Facebook and Twitter.

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A new study conducted by the Better Than Cash Alliance, a partnership consisting of governments, companies, and international organizations, shows Indonesia has now become the world's fastest-growing mobile-commerce market (m-commerce). Growth of online shopping in Southeast Asia's largest economy is attributed to the rising spending power of Indonesia's middle class as well as expanding Internet and smartphone penetration. According to the study, Indonesia's m-commerce market surged 155 percent in 2016.

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The number of smartphone users in Indonesia is rising rapidly in line with growing per capita GDP and widening Internet penetration across the Archipelago. Based on data from research institute eMarketer there were 69.4 million smartphone users in Indonesia at the end of 2016. Moreover, the number of Indonesian smartphone users is expected to grow to 103 million by 2018, which would make Indonesia the fourth-largest smartphone market worldwide after China, India and the United States.

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