PT Telkom Indonesia, a state-owned telecom operator, has unblocked streaming giant Netflix, after four years of negotiations.
Telkom said the decision came after a change in the U.S. company’s approach to the country. This includes Netflix offering parental controls as well as agreeing to examine complaints from Indonesia’s government or regulators over content within 24 hours.
After Netflix launched in January 2016 in Indonesia, it ran afoul of the Indonesia’s film censorship board in 2016 for carrying content deemed inappropriately violent or sexual. It was subsequently blocked by Telkom, who said it would continue blocking the service until it adhered the country’s regulations.
The world’s largest Muslim-majority country, with a youthful population of 270 million, is experiencing a boom in its digital economy, which is seen reaching $130 billion by 2025, according to a study by Google, Temasek Holdings and Bain & Company.
State-owned Telkom, which operates a mobile network with 170 million mobile phone subscribers as well as a home internet company, is aiming to increase the availability of content providers to its users.
Telkom’s cellular operator subsidiary Telkomsel earlier said its digital business earning rose 23.1 percent to Rp 58.24 trillion in 2019 as mobile data consumption grows. Telkom’s home Internet provider business IndiHome recorded 28.1 percent increase in its earning to Rp18.3 trillion last year.
Netflix business development manager Tizar Patria Irsyadi said in a statement that they were delighted that Netflix is now accessible through Telkom. “We look forward to continually improving our service for all Indonesians as we introduce more local shows on our service.”
Netflix would be required to pay a 10 percent value-added tax in Indonesia. Netflix is willing to pay the digital tax.
Telkom’s vice president for corporate communications, Arif Prabowo, said he hoped that Netflix would advance the country’s entertainment industry by increasing the number of local productions.
Telkom had held discussions with Disney’s Disney+ platform as part of its digital push. The report said Disney+ is currently in the middle of a hiring spree in the region and is expected to launch in Southeast Asia as early as 2021.
Netflix in December 2019 said it would be accelerating its growth overseas, with its Asia-Pacific business recording the biggest membership and revenue gains among all regions over the past three years.
Netflix is focusing on its international business as the streaming landscape becomes more crowded, with Walt Disney Co’s Disney+ and Apple’s Apple TV+ entering the market and two other services – HBO Max, from AT&T-owned WarnerMedia, and Comcast-owned NBCUniversal’s Peacock – set to launch in 2020.
