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KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

KADIN INDONESIA

Indonesian Chamber of Commerce and Industry

Impact and Benefits of Starlink

Kadin Indonesia for Communication and Informatics held a Focus Group Discussion (FGD) on the impact and benefits of Starlink on the telecommunications industry and other industrial sectors in Indonesia, on Thursday (6/6/2024).

The FGD also aims to find solutions and formulate policies that can accommodate the interests of all parties while supporting technological advances that benefit the outermost regions while protecting the local telecommunications industry.

Digital transformation has become a priority for the Indonesian government as one of the main drivers of economic growth and improving people's quality of life. In this digital era, high-speed internet is the backbone of the digital transformation. However, the current limited telecommunications infrastructure, especially in remote areas, is a major obstacle to achieving this goal.

According to data, internet penetration in rural areas is very low, at only 1.1% by 2022, indicating a significant access gap between urban and rural areas. Furthermore, only around 12% of Indonesians have access to fixed broadband-based internet, while the majority still rely on mobile networks, which are often more expensive and less reliable.

Starlink, Elon Musk's satellite-based internet service through his SpaceX company, offers an innovative solution to fill the void in Indonesia's telecommunications infrastructure. Starlink uses Low Earth Orbit (LEO) satellite technology that can provide wide and consistent internet coverage at high speeds. By mid-May 2024, Starlink is set to launch and has secured an agreement and license to operate in Indonesia.

Despite this, the internet service provider (ISP) industry in Indonesia has grown rapidly, with 1,046 authorized ISP companies. Starlink's presence has raised concerns among local service providers, particularly regarding potential market disruption and existing regulations. The involvement of local ISPs in the form of cooperation with Starlink is expected to provide a win-win solution, where local ISPs can utilize Starlink's technology to expand their service coverage, while Starlink can fulfill local regulatory obligations.

According to data from the Indonesian Internet Service Providers Association (APJII), by the end of 2022, the internet penetration rate in Indonesia will reach 73.7% of the total population, with the number of internet users around 205 million people. However, there is still a gap in internet access between urban and rural areas, which is a big challenge for the government and telecommunication service providers.

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KADIN INDONESIA

Indonesian Chamber of Commerce and Industry