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Indonesia on Brink of Becoming Digital Economy Giant

Date

06 Feb 2020

Sections

InfoSociety

Jakarta: The migration of analogue TV and the assignment of the digital dividend to mobile broadband services could unlock a new era in high-speed connectivity for Indonesia’s citizens, according to a new report released by the GSMA. The move would expand the Indonesian economy by $10.5 B over the next decade, adding 1 per cent to the country’s GDP by the end of 2030.

The report, ‘Spotlight on Indonesia: The imperative of seizing mobile broadband opportunities now’, was launched at a GSMA industry event in Jakarta today, in the presence of Dr. Ir. Ismail MT, the Director General of Resources Management and Equipment of Posts and Informatics, Ministry of Communication and Informatics (KOMINFO). The event brought together leaders from across the mobile industry, national associations and government to discuss Indonesia’s digital future.

“For the new People’s Consultative Assembly, releasing the digital dividend band is critical to Indonesia’s future competiveness within the region,” said Julian Gorman, Head of Asia Pacific, GSMA. “Indonesia is on the brink of becoming a digital economy giant but this could be compromised if the country can’t sustain an attractive digital landscape. Even a short delay in Indonesia’s digital transformation could cost its economy billions of dollars, and prevent millions of people from accessing mobile broadband services.”

“Indonesia is the third-largest mobile market in APAC and a significant user of digital platforms,” said Dr. Ir. Ismail MT, the Director General of Resources Management and Equipment of Posts and Informatics, Ministry of Communication and Informatics (KOMINFO). “We are rapidly progressing towards being a digital powerhouse in the region, and this requires accelerating our digital transformation. To help achieve this, the Indonesian government is amending the Broadcasting Act this year as a matter of urgency to enforce the release of the digital dividend.”

The mobile sector in Indonesia has experienced massive growth, with 176 million Indonesians now subscribing to a mobile service. Mobile has been instrumental in connecting millions to the internet, particularly in the areas that are hardest to reach. In the next five years, the forecasted number of mobile subscribers will reach 199 million, with 177 million using their mobile services for internet access.

Mobile is also essential in the digital transformation of traditional industries such as agriculture and manufacturing and stimulating innovation among domestic start-ups. Indonesia has produced five ‘unicorns’ (privately held start-ups valued at over $1 B). However, a lack of spectrum is limiting operators’ ability to expand network coverage, hindering future adoption.

Malaysia, the Philippines and Singapore have completed their analogue switch-off processes, allowing operators to strengthen their 4G offerings and test 5G pilot networks. In contrast, Indonesia has not yet reallocated this critical ‘digital dividend’ spectrum (700 MHz) to mobile services.

“The technical characteristics of this range mean it can support better coverage with less infrastructure compared to higher bands,” explains Brett Tarnutzer, Head of Spectrum, GSMA. “By enabling operators to reduce their capital costs, consumers in turn benefit from a faster pace of deployment.”

On 1 August 2018, the Ministry of Communication and Information Technology (MCIT) issued a consultation on digital TV broadcasting but made no announcements on timelines for when the 700 MHz band is to be released to mobile operators. As the timely and exclusive allocation of the 700 MHz band in sufficient quantity is key to operators bringing affordable 4G – and in future 5G – services to all parts of Indonesia, the GSMA report calls for planning for the release of the digital dividend to move forward without hesitation.

“The 44 per cent of the population living in rural areas, who today suffer from the prevailing coverage gap, depend on swift action,” added Julian Gorman.

The GSMA report, ‘Spotlight on Indonesia: The imperative of seizing mobile broadband opportunities now’, is available in English here:
https://www.gsma.com/spectrum/wp-content/uploads/2020/02/Indonesia-Digital-Dividend.pdf

-ENDS-

About the GSMA
The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators and nearly 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces the industry-leading MWC events held annually in Barcelona, Los Angeles and Shanghai, as well as the Mobile 360 Series of regional conferences.

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.

Media Contacts:
For the GSMA
Alia Ilyas
+44 (0)7970 637622
ailyas@gsma.com

GSMA Press Office
pressoffice@gsma.com

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