Industry group GSMA warned an Indonesian digital transformation strategy could be hampered unless it reassesses how it prices 5G frequencies.
Analysis from GSMA Intelligence predicts around 33 per cent of the expected socioeconomic benefits of 5G could be lost between 2024 and 2030 if the price of new spectrum bands reflect previous auction levels.
The research outfit stated a sum of IDR216 trillion ($13.8 billion) is at stake.
In a report, the GSMA recommended Indonesia reduce spectrum prices to enable operators to make the required heavy investments in 5G, arguing investment would be lower without cuts, resulting in slower network rollouts, poorer consumer experiences and missed economic growth opportunities.
Julian Gorman, GSMA’s head of Asia Pacific, argued Indonesia’s government should include spectrum supply and pricing in future policy as it prepares for 5G auctions.
“This requires a well-crafted regulatory framework for a successful auction that delivers a fair return for the government and encourages digital growth.”
GSMA Intelligence estimated annual spectrum costs for mobile operators in the country increased more than five-fold since 2010 due to high auction payments and licence renewal fees.
Industry revenue growth has not kept pace, with ARPU declining 48 per cent while spectrum fees continued to rise, when adjusted for inflation.
The research unit stated annual spectrum costs in Indonesia stand at 12.2 per cent of total mobile revenue, compared with an APAC average of 8.7 per cent and 7 per cent globally.
Indonesia intends to award spectrum in the 700MHz, 2.6GHz, 3.5GHz and 26MHz mmWave bands over the next two years.