iQIYI and Telkomsel: A Strategic Play for Dominance in Southeast Asia's Streaming Market

The streaming wars are no longer confined to the U.S. and Europe. In Southeast Asia, a region home to over 660 million people and a fast-growing digital economy, iQIYI—the Chinese entertainment giant—has struck a partnership with Indonesia's leading telecom provider, Telkomsel, that could redefine the global streaming landscape. Announced on June 30, 2025, the collaboration combines iQIYI's expertise in content production with Telkomsel's vast network infrastructure, aiming to capture a slice of Indonesia's $2.4 billion digital entertainment market. This is a play for scale, localization, and synergies—and investors should take note.

The Pillars of the Partnership: Content, Connectivity, and Collaboration

The partnership is built on three strategic pillars: localized content, optimized connectivity, and targeted marketing, each designed to tackle the unique challenges of entering Indonesia's market.

1. Content Localization: A Recipe for Audience Engagement
iQIYI and Telkomsel are co-producing six original Indonesian drama series, including titles like Tukar Ranjang and Bercinta Dengan Maut, in collaboration with local studios Leo Pictures and Hitmaker Studios. This isn't just about translating content—it's about creating stories that resonate culturally. Micro-series like Love Born from Lies, which have driven user growth in Indonesia, will also be expanded. The platform has localized its content library into Bahasa Indonesia, backed by research into local viewing preferences.

The focus on micro-dramas and celebrity-driven content (e.g., the “Starship Project” featuring Global Ambassador Chen Zheyuan) is a shrewd move to attract young audiences, who represent 60% of Indonesia's population.

2. Telecom Synergies: Solving the Streaming Infrastructure Challenge
Telkomsel's network infrastructure ensures seamless content delivery, critical in a country where 4G coverage is expanding but still uneven. Bundled mobile plans—such as the 7-day (0.5GB) and 30-day (2GB) packages—reduce barriers to access. The “Streaming Quota” feature prioritizes iQIYI content without draining users' regular data plans, a clever way to retain subscribers in a price-sensitive market.

This data underscores why Telkomsel's network is a strategic asset: mobile data usage in Indonesia has surged by 300% since 2020, driven by affordability and urbanization.

3. Marketing and Monetization: Building a Sustainable Ecosystem
The partnership leverages Telkomsel's 170 million subscribers to cross-promote iQIYI's platform. Subscriptions can be purchased via Telkomsel's prepaid and postpaid plans, simplifying onboarding. Meanwhile, advertisers gain access to a dual audience: iQIYI's content library and Telkomsel's user base. Product placements and interactive ads in localized series offer advertisers a new channel to reach consumers.

The Data-Driven Case for Growth

Indonesia's streaming market is ripe for disruption. Only 30% of its population uses streaming services today, but this is expected to grow to 50% by 2027 as smartphone adoption rises.

iQIYI's stock has underperformed in recent years due to domestic market saturation and content costs. This partnership could change that. By leveraging Telkomsel's scale, iQIYI reduces infrastructure investments while expanding its user base. Meanwhile, localized content lowers reliance on costly international licenses, improving margins.

Risks and Considerations

The path isn't without hurdles. Netflix and Disney+ have already established footholds in Indonesia, and local players like Viu and Iflix are aggressive competitors. Regulatory risks, such as content censorship, also loom. However, iQIYI's deep ties to Chinese content—especially dramas, which are popular in Indonesia—provide a niche advantage.

An Investment Opportunity in a High-Potential Market

For investors, this partnership is a bet on two trends: Southeast Asia's digital boom and the power of localized content. iQIYI's valuation—currently at a 40% discount to its 2018 IPO price—suggests it's undervalued relative to its growth potential.

The telecom synergy with Telkomsel could be a game-changer. By reducing customer acquisition costs and leveraging existing infrastructure, iQIYI can scale without massive upfront spending. If it replicates this model in other Southeast Asian markets (e.g., the Philippines or Vietnam), its stock could see a significant re-rating.

Final Verdict: A Strategic Move with Upside

iQIYI's partnership with Telkomsel is a textbook example of how to enter a new market: combine local expertise with infrastructure, tailor content to cultural preferences, and monetize through synergies. For investors, this isn't just about Indonesia—it's a blueprint for global expansion. With Southeast Asia's streaming market poised to hit $5 billion by 2027, iQIYI's stock offers a compelling entry point for those willing to look beyond the U.S. streaming giants.

The numbers suggest this could be the catalyst iQIYI needs to turn the tide.