Minister says state-backed Telkom to drive USD24bn broadband expansion

12 Dec 2014

Indonesian state-owned telco PT Telekomunikasi Indonesia (Telkom) will set the pace in the country’s proposed USD24 billion drive to expand the country’s broadband capacity over the next five years, the communication and information minister is quoted as saying. Reuters cites the minister for communications and technology, Mr Rudiantara, as saying that the government is considering extending ‘unspecified incentives’ to Telkom in an effort to bolster internet access in southeast Asia’s largest economy. Rudiantara said: ‘I’m in the position to support Telkom to take a lead on this broadband plan,’ adding that the government is in the process of finalising the details of the plan.

According to ministry data, only 12% of the population had access to mobile broadband internet in 2013, with data speeds at a relatively weak 512kbps, while for fixed broadband the figure is even lower at around 5%. Rudiantara says the government sees faster and more widely available internet access will drive Indonesia’s nascent e-commerce market, which is estimated to more than double to USD25 billion by 2016, up from around USD12 billion in 2014.

Details are sketchy on the possible incentives on the table, although Rudiantara said the government was discussing the subject with local e-commerce companies such as PT Tokopedia, which has recently secured USD100 million in additional funding from SoftBank Corp of Japan and US venture capital firm Sequoia Capital. He also said that the state is contemplating amendments to the telecoms legal framework to deal with ‘an anticipated wave of consolidation’ among local carriers that could see the total drop by more than half to four over the next decade.

Indonesia, Telkom Indonesia