The latest stats from S&P Global show that 220 operators have actively launched commercial 5G services in 85 markets. However, Indonesia is not one of them, and unless it can come up with a business case and enough infrastructure investment, it may miss the government’s launch target three years from now.
Ismail, Director General of Frequency Spectrum Management and IT Equipment Standard, Ministry of ICT, Indonesia recently admitted that the speed at which 5G is being adopted in the country is not as fast as hoped. The initial target for an equitable 5G rollout in the country is 2025.
However, Ismail said that there is progress, and the biggest challenge at the moment is investment. According to him, 5G can only really take off in Indonesia when the infrastructure is ready, which requires significant investment to happen. (S&P Global notes that this is a common refrain among markets where 5G has not yet launched. The reasons typically boil down to “poor network infrastructure and late adoption of 4G”.)
Lack of a 5G business case
As it stands, Ismail noted that operators have yet to be convinced that there is a demand for 5G in Indonesia. He said there is a gap between the government’s target and what the operators are seeing on the ground.
The government’s role in this regard is to continue to educate the market, Ismail said. He added that the government has to work on setting up an ecosystem to help operators educate the market and increase the potential for 5G adoption.
To make this happen, there has to be a clear business case for 5G. Ismail said that the government needs to support initiatives that highlight the benefits of 5G technology. One way to do this is by developing use cases that show how 5G can be used in a productive manner. Whether this is through B2B or B2C applications, it needs to be made clear how 5G can improve people’s lives, he said.
“With the increase in 5G revenue potential, operators have the confidence to make large investments,” he added. Ismail also pointed out that Indonesia is looking at how other countries have succeeded in deploying 5G at the enterprise level, with applications in a variety of sectors.
Indonesia gets the spectrum ready
In an effort to improve the quality and coverage of its digital economy, the government has recently announced plans to auction off segments of the 2.1-GHz spectrum band. This move may help accelerate 5G adoption in the country.
Following the Ministry of Communication and Information’s near cancellation of an auction for the 2.3 GHz band last year, it is now too late for 5G in Indonesia, according to a Jakarta Post editorial.
In addition, the government has yet to tackle the underlying issue of 5G network quality and frequency adequacy in Java amid the sluggish auctions to provide wider access, according to the article.
The editorial points out that the disparity in 5G development will put Indonesia at risk of lagging further behind, in terms of telecommunications and the maturity if its digital economy.