Broadband Development in Indonesia

FinanceLoans / Lease

  • Author Azzahra Jefri
  • Published June 15, 2015
  • Word count 469

Jakarta, Indonesia – Indonesian archipelago is a get-go of both domestic and foreign investors when it comes to telecommunications. Being the fourth most populous country in the world with 237 million citizens, the country is a huge marketing attraction. This sector is also supported by the fact that compared to other sectors within the economy; telecommunications is one of the most prominent sectors having a growth rate of 12% as of 2012, a percentage far above the GDP growth.

The three leading telecommunications provider in the country are Indosat, XL Axiata, a subsidiary of Axis Capital Group based in Malaysia and Telkomsel. These three has been dominating the market with promotions and services that has been renowned all over the world and has been acknowledged as exemplary in the field of telecommunications.

With the help of these three and other networks, the government of Indonesia has introduced the Indonesian Broadband Plan (IBP) as an operational policy document to develop the broadband sector in the country with the ultimate goal of increasing the citizens’ welfare. This goal is to be achieved through linking broadband with other sectors in the economy. It can be remembered that before 2009, may citizens use Warung or Warnet in Internet Cafes to access technology. The move to develop broadband has lessened complaints regarding issues in warnets and slow connection.

There are, however, many more questions than answers with this plan. Ultimately, the strength of IBP will influence whether other stakeholders (cross-sectoral coordination and between local and central governments) will follow the guidance.

The most important flagship of the IBP named the Palapa Ring is an initiative to foster the fiber connectivity between islands in Indonesia both in the western and particularly the eastern area where the broadband infrastructure is currently unavailable. As one of the most important flagships, the Palapa Ring can be seen as a stand-alone chapter with or without the IBP being implemented as a government regulation. Within the Palapa Ring framework, there has been a long commitment of the private sector (PT Telkom) to build the broadband infrastructures.

The IBP is a step forward in the direction for Indonesia to have a more concrete and detail guideline to develop the ICT sector and broadband in particular as the future engine of growth and general purpose technology (GPT).

There is also the invention of 4G networks, an upgrade on 2G and 3G connections. The 4G Long Term Evolution (LTE) service is reviewed to answer the need for high-speed broadband connection that will ensure a seamless flow of data in today’s era.

Internet-based cellular phones are becoming increasingly popular among Indonesians for daily communication, job- and business-related purposes.

As of now, Telkomsel, XL, Indosat and Tri are still awaiting the government’s ruling on 4G LTE for cellular operators, including call and text messages over the broadband network.

Being the fourth most populous country in the world with 237 million citizens, the country is a huge marketing attraction.

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