Market Dynamics, Business Strategy, and Performance of the Telecommunications Industry in Indonesia for the 2021-2025 Period

Authors

  • Aura Bunga Radinda Universitas Riau
  • Nadila Aprilianti Universitas Riau
  • M.Yusuf Ramadhan Universitas Riau
  • Azhura Nur Lathifah Universitas Riau
  • Iqbal Syaputra Universitas Riau
  • Keira Desma Dea Universitas Riau
  • Zhafrand Fitra Irawan Universitas Riau

DOI:

https://doi.org/10.61536/escalate.v4i4.891

Keywords:

Market Concentration, Structure-Conduct-Performance, Concentration Ratio (CR4), Herfindahl-Hirschman Index (HHI), Telecommunications Mergers

Abstract

This study analyzes market concentration, market dynamics, corporate strategies, and company performance in the Indonesian telecommunications industry during 2021–2025 using the Structure-Conduct-Performance (SCP) approach. This quantitative descriptive study uses secondary data from annual financial reports and purposive sampling based on revenue and data availability. The study identifies ten companies in the annual sample, comprising cellular operators and telecommunications infrastructure providers. However, the combined observation list contains eleven company codes across the five-year period because Smartfren was reported independently from 2021 to 2024 and ceased to appear as a separate reporting entity following its merger with XL Axiata in 2025, while Bali Towerindo entered the observed list in 2025. Market concentration is measured using the Concentration Ratio of the four largest companies (CR4) and the Herfindahl-Hirschman Index (HHI) under two scenarios. Scenario A combines cellular operators and telecommunications infrastructure providers, whereas Scenario B focuses exclusively on cellular operators. The results show that CR4 in Scenario A remained above 89% and reached 94% in 2025, while Scenario B recorded a CR4 of 100% throughout the observation period. The HHI exceeded 2,500 in both scenarios, indicating a highly concentrated market under the stated classification. Concentration declined during 2021–2024 before increasing in 2025 following the XL Axiata–Smartfren merger. These findings indicate a structural increase in market concentration after the merger, but do not establish that competition is weak in every dimension or that higher concentration necessarily improves company performance.

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Published

2026-10-15

How to Cite

Aura Bunga Radinda, Nadila Aprilianti, M.Yusuf Ramadhan, Azhura Nur Lathifah, Iqbal Syaputra, Keira Desma Dea, & Zhafrand Fitra Irawan. (2026). Market Dynamics, Business Strategy, and Performance of the Telecommunications Industry in Indonesia for the 2021-2025 Period. Escalate : Economics and Business Journal, 4(4), 186–197. https://doi.org/10.61536/escalate.v4i4.891

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