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Consolidated 2600 GHz Carrier and Spectrum

 

The consolidation process for Indosat Ooredoo and Hutchison 3 Indonesia should have gone very smoothly. Combining two operators who have different technologies and market segments can actually be a strong asset to move forward, especially in the digital transformation process that is being promoted by the Jokowi government. Experts assess that competition in the telco industry will be better, more efficient, if the number of operators is reduced again, to three, at least four. Law No. 5 of 1999 concerning the Prohibition of Monopolistic Practices and Unfair Business Competition states that a company may not dominate the market more than 50 percent; Consolidated 2, 3 or more companies are prohibited from controlling 75 percent of the market. The consolidation between Indosat Ooredoo and Hutchison Tri Indonesia (Tri), seems to stimulate the market, the possibility of a merger between XL Axiata and Smartfren has been widely discussed. If that happens, we only have four cellular operators, Telkomsel remains ahead with current subscribers of 169.1 million, then IOH 104 million, XL-Smart 84 million, and Net1, if there are more in the future, 100 thousand. People are pessimistic that Net1 will continue to live with all its capabilities that have been surpassed by other operators, the technology has changed to 450 MHz LTE-R, a long term evolution-railway, trains in China have begun to use it to replace GSM-R technology. KCIC, the Indonesia-China Fast Train, is still using GSM-R technology, by requesting a spectrum as wide as 4 MHz in the 900 MHz range belonging to Telkomsel for operational control of the Jakarta - Bandung Fast Train.



However, there are still many who are not aware, for some time there has been a "new operator" working on the 2.6 GHz spectrum, the spectrum used for broadcasting via satellite, such as Indovision and others. In the limited market, it is said that there are already 5G technology phones that can be used, but all of them are still not licensed and work as broadband fixes like First Media. In fact, the 2.6 GHz spectrum along with 26 GHz and 35 GHz is reserved by the government for 5G services, which operators are starting to develop using a frequency of 2300 MHz and a combination of 1800 MHz and 2100 MHz.

Broadcast television stations hold a 2600 mHz spectrum license until 2024, and maybe that year the government will change, policies change, operators can add more, especially 5G operators. In this 2600 MHz spectrum, there is a 190 MHz wide band used by television broadcasters whose total non-tax state revenue (PNBP) in the form of usage rights fees (BHP) is less than Rp 100 billion a year. If it is auctioned later, following the example of the 30 MHz wide band in the 2300 MHz spectrum, which Telkomsel won a few years ago with a figure of Rp 1.05 trillion, the state will receive at least Rp 6 trillion plus upfront fees, in addition to the annual BHP of that amount.

Internet speed

In the current consolidation, the expansion of the 4G/LTE network is trying to lead customers away from 2G and 3G services whose technology is "obsolete", moving to 4G LTE. The 2G market, according to the Head of the Indonesian Telecommunication Industry Policy and Regulatory Study Center - Bandung Institute of Technology (Pikerti - ITB) Dr. Ir Ian J Matheus Edward, is still there, the mobile phone vendors are still running even though the volume is small. However, today's society is also experiencing changes in needs, as evidenced by data released by the World Bank (2021), the order of the most busy citizens on the internet occurs in developing countries. In order, the highest in the Philippines, Brazil, Thailand and Colombia. Indonesia ranks fifth. This trend has triggered an increase in demand for 4G/LTE standard internet access, reinforced by the pandemic that has accelerated their digital transformation process. Previously, it had been seen, changes in people's digital lifestyle had been seen.



According to data from the Indonesian Internet Service Providers Association (APJII – 2021), the highest usage is online shopping, followed by entertainment needs, then transportation, news information, and gaming activities. Access to public services and banking services is equally shared, but still in the top 10 usage. Actually all operators are ready, they generally already provide 4G/LTE services, only not all have the ability to expand to regions, except for Telkomsel, which is supported by the strong infrastructure of the Telkom Group. Other operators will think about the pros and cons of investing in remote areas except by collaborating. The merger between Indosat Ooredoo and Tri is also an opportunity to accelerate the distribution of 4G/LTE networks. Moreover, in terms of network management quality, both are very possible, so combining the two will simultaneously increase internet speed.


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