Jakarta, INTI - In recent years, Starlink Indonesia has become a hot topic of discussion. From home users in remote areas, businesses in white-out areas, to companies needing a backup internet connection, everyone is eyeing Starlink as an internet solution based on low-Earth Orbit (LEO) satellites.
This phenomenon marks a shift in the landscape of the internet industry in Indonesia, which has previously been dominated by fiber-optic networks.
LEO satellites orbit the Earth at an altitude of around 500-2,000 km,much lower than geostationary (GEO) satellites, which are at 35,786 km. This shorter distance brings the advantage of low latency, with ping times below 50 ms, comparable to fiber-optic internet. It offers stable signal quality, even in remote areas, and offers flexible global coverage, with a single LEO constellation capable of covering land, sea, and mountains.
However, it's important to understand that the role of Internet Service Providers (ISPs) remains the backbone of the digital ecosystem. ISPs are entities that provide internet access to end users through various infrastructures, such as fiber optic, wireless, and cable networks, connecting user devices to the global network.
LEO Satellites Have the Potential to Change the Competitive Structure of Jakarta's ISPs
As LEO technology advances, a big question arises: will LEO satellites replace fiber optic's dominance in Indonesia?
In response, Henry, Chairman of APJII DKI Jakarta, assessed that the potential for change is indeed there, but it won't happen instantly.
"The potential is there, but it will take time to make direct changes," he said.
He explained that in large cities, fiber optic infrastructure remains the main backbone. However, the presence of LEO is beginning to shift the basic business model of ISPs, particularly in terms of service flexibility.
In this context, LEO doesn't necessarily replace fiber, but rather complements it. This technology can act as a backup solution when fiber networks are disrupted or unavailable in certain areas.
Overly Competitive Industry
On the other hand, the ISP industry in Indonesia, particularly in Jakarta, currently faces extremely high levels of competition.
According to Henry, the number of registered ISPs in Jakarta has exceeded 300. Nationally, that number has reached around 1,500 ISPs, with more than 1,000 operating on the island of Java.
This situation has created a phenomenon of overcompetition, where the large number of players leads to increasingly competitive service prices, even tending to squeeze profit margins.
As a result, despite increasing demand, not all industry players are able to enjoy significant revenue growth.
The Balance Between Traffic Growth and Industry Revenue|
Internet traffic growth in Indonesia has indeed continued to surge in line with increasing digital adoption. However, this growth is not always directly proportional to the increase in industry revenue.
Henry highlighted the imbalance between the surge in traffic and the revenue generated by ISPs.
"Traffic growth is very high, but revenue is not as high. Some revenue is even stagnant, while others are declining slightly," he explained.
This situation presents a unique challenge for the industry, particularly in maintaining business sustainability amidst price pressures and intense competition.
conclusion
The rise of LEO satellite technology is not a direct replacement for fiber infrastructure, but rather a strategic complement to it. In Indonesia’s evolving digital landscape, the future of connectivity lies in a hybrid approach, where fiber remains dominant in urban areas, while LEO bridges gaps in remote regions and strengthens network resilience.
As competition intensifies and market dynamics shift, ISPs must adapt their business models to stay relevant. Those who can integrate flexibility, expand coverage, and leverage both technologies effectively will be better positioned to thrive.
Ultimately, the convergence of LEO and fiber signals a new phase for Indonesia’s internet ecosystem, one that is more inclusive, resilient, and prepared to meet the growing demands of a digital-first society.
Read more: Henry - Over Competition in ISP Industry? Insights from APJII Jakarta