Telkom Indonesia plans to allocate the majority of its capex budget next year to pushing the government’s five-year Indonesia Digital Network, which was announced in October.
The IDR278 trillion ($22.1 billion) public-private initiative aims to give the majority of Indonesians access to affordable internet service, the Jakarta Post said. While details haven’t been finalised, the government is expected to give operators incentives for pushing the broadband project.
The country’s fixed broadband penetration is estimated at less than 5 per cent, while just 12 per cent of the country’s 251 million people have access to mobile broadband. But the speed of mobile access is generally only 512kb/s, according to the Communications and Information Ministry.
The operator, which is 52 per cent state owned, will keep its capex at the IDR20-25 trillion level next year and continue to allocate half of the budget to increasing wireless internet access. It will invest 30 per cent on backbone access (fibre and satellite) and 20 per cent on convergence technologies, the Post said.
Telkom is the parent of Indonesia’s leading operator Telkomsel, which has 139 million mobile connections and a 46 per cent market share, according to GSMA Intelligence. It has plans to expand the number of internet access points tenfold next year to one million. The operator estimates the cost of one access point is IDR6 million.
The expansion will allow it to increase the number of prepaid customers using its internet service, called Speedy Instant, from 25 million to 40 million and boost revenue of the service by 40 per cent to IDR175 billion.
Telkomsel recently launched 4G in Jakarta and Bali but only has about 10,000 customers. XL and Indosat, the number 2 and 3 players, have plans for commercial 4G service this month in selected cities.