Wed, 26 Feb 2025 17:02 | Internet and Telecommunication | Editorial INTI
Jakarta, INTI – The Indonesian government, through the Ministry of Communication and Digital (Komdigi), is preparing for the auction of the 1.4 GHz frequency spectrum in 2025. This auction aims to create equitable connectivity, ensuring internet services that are accessible and affordable for the wider community.
In a discussion titled "Frequency Auction: For Whom?" held in Jakarta, Benny Elian, Coordinator for Digital Infrastructure Policy at Komdigi, stated that this spectrum auction is expected to enhance the penetration of fixed broadband networks in Indonesia. With this available spectrum, the public is anticipated to enjoy lower-cost internet services.
"We want to ensure and strive for fixed broadband to be more affordable for the public. This is one of the key objectives of the 1.4 GHz spectrum auction," said Benny.
Benny Elian reaffirmed that this spectrum would be utilized to provide high-quality internet services at affordable rates.
"We aim to provide cheaper internet for the public, with rates ranging from IDR 100,000 to IDR 150,000 per month for speeds of up to 100 Mbps," he stated.
Komdigi targets the completion of the 1.4 GHz auction in the first half of 2025, before the auction of the 700 MHz spectrum takes place. So far, seven companies have expressed interest in acquiring this frequency. However, Benny mentioned that the number of participants could increase once the official auction process begins.
Komdigi is currently finalizing the auction mechanisms. Of the ten telecommunications providers in Indonesia, seven have already shown interest in participating. However, the names of these interested providers have not been officially disclosed by the government.
The 1.4 GHz spectrum to be auctioned has a bandwidth of 80 MHz and is expected to provide internet speeds of up to 100 Mbps. With this capacity, stable and high-quality internet services are anticipated to be accessible to households and the education sector.
Denny Setiawan, Director of Digital Infrastructure Strategy and Policy at Komdigi, emphasized in the Morning Tech discussion in South Jakarta that the government is targeting the auction process to be conducted in the first half of 2025.
"A dedicated team is already in place, and they have started optimizing preparations," Denny stated.
Additionally, Komdigi is considering various aspects in determining the auction scheme, including base price factors and bidding mechanisms. Two selection methods currently being considered are highest-bid auction or beauty contest, where bids are assessed based on the best proposals regarding future development commitments.
Fixed broadband penetration in Indonesia remains relatively low, covering only 21.31% of total households. Meanwhile, the average download speed is just 32.07 Mbps, lagging behind other countries.
Therefore, utilizing the 1.4 GHz frequency through Broadband Wireless Access (BWA) is seen as a solution to expand internet coverage at a lower cost.
However, according to Kamilov Sagala, Dean of the Faculty of Law at Universitas Mitra Bangsa, transparency in the auction process is crucial to preventing monopolistic practices.
"Frequency is a limited resource that must be managed fairly. Otherwise, only a handful of companies will benefit," Kamilov emphasized.
He also pointed out that with seven interested parties, competition could become intense, potentially driving up spectrum prices if the auction mechanism is solely based on bidding amounts.
Sigit Puspito Wigati Jarot, Head of National Telematics Infrastructure at the Indonesian Telematics Society (Mastel), highlighted the importance of developing quality digital infrastructure and fostering digital talent, particularly among the younger generation.
"Indonesia is currently behind in 5G development, with average speeds only reaching 30 Mbps, significantly lagging behind other ASEAN countries," he noted.
He emphasized the need for adaptive and collaborative regulations to ensure that digital transformation is sustainable and competitive.
Sigit also stressed the need for regulatory clarity before the auction is conducted. He asserted that regulations should differentiate between existing mobile broadband services and those to be provided through the 1.4 GHz spectrum.
"We cannot simply apply the same regulations as those for mobile broadband or fiber optic networks. Komdigi must carefully assess this," he stated.
Apart from regulatory aspects, he also highlighted business models that could optimize spectrum utilization. One viable approach is the community network model, where local governments participate in providing internet connectivity. This model has been successfully implemented in countries like the United States and Spain, allowing for more region-specific connectivity management.
In the telecommunications sector, various competition models can be applied in managing this spectrum. Sigit explained that possible approaches include Infrastructure-Based Competition, Wholesale Access Model, and Public-Private Partnership (PPP).
"Each model has its advantages and challenges. For Indonesia, a hybrid approach involving local governments could be the most suitable solution," he said.
Additionally, post-auction service tariffs should also be considered. He emphasized that pricing for mobile services and Fixed Wireless Access (FWA) should be differentiated to ensure fair competition.
The 1.4 GHz spectrum auction is a strategic move by the government to achieve wider and more affordable internet connectivity across Indonesia. With speeds of up to 100 Mbps and competitive pricing, high-quality internet access should no longer be a luxury for the public.
However, challenges remain, from regulatory preparedness and transparent auction mechanisms to effective implementation strategies. The success of this initiative will heavily depend on synergy between the government, telecommunications providers, and the public as end-users.
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