The Indonesian mobile phone market is heavily competed and prices are low: you can pick up a prepaid SIM card for less than Rp 20,000 (US$ 2) and calls may cost as little as Rp 1,000 a minute (subject to the usual host of restrictions). SMS service is generally very cheap, with local SMS as low as Rp.100-150, and international SMS for Rp.400-600. Indonesia is also the world's largest market for used phones and basic models start from Rp 200,000. The largest operators are Telkomsel (brand Kartu HALO, simPATI, Kartu As), Indosat (brands Matrix, Mentari, IM3), 3 , AXIS , and XL Axiata . In general Telkomsel has the best coverage, especially in remote places, while the other three are slightly cheaper; on Java and Bali, any will work just fine.
If you have Global System Mobile (GSM) cellular phone, ask your local GSM operator about "roaming agreement/facility" in Indonesia. Most GSM operators in Indonesia have roaming agreement with various GSM operators worldwide. Using roaming facility, you can use your own cellular phone and GSM SIM card in Indonesia. But, of course, this means you will pay several times more than if using local SIM.
Most Indonesian operators use GSM, but beware of the few offering CDMA phones: they are slightly cheaper, but generally not usable outside major cities. Be sure to double-check when buying!