A lobby group for communication and information technology industries recently called for a change in the government’s spectrum policy to ensure that mobile phone operators will have more flexibility in using technology to improve their services.
Setyanto P. Sentosa, chairman of the Indonesian Telecommunication Society (Mastel), said there should be a breakthrough to halt the fall in the average revenue per user (ARPU) of the operators, which was now at a record low of between Rp 30,000 (US$3.27) and Rp 40,000 per month.
A study by IE Market Research estimates that by 2013, the ARPU could slide to Rp 31,200 per month.
Setyanto said that this low ARPU could rise by 15 percent if the government applied a “technology neutral spectrum policy” in which regulators left the industry to decide the technologies applicable to a given spectrum.
The government currently regulates the technology that can access a certain spectrum. The 1900 megahertz and 900 megahertz spectrum, for example, are respectively dedicated to CDMA and GSM-standard technologies. Both standards are among the main network technologies.
According to Setyanto, operators must freely decide upon the technology to be used to meet the surge in data consumption.
Data consumption, especially through the Internet, is best supported by third generation (3G) technologies, which enable easy access to multimedia applications and broadband services.
“Technological advances cannot be locked on to one type of technology, given the rapid development in [technology use],” Setyanto said.
However, operators are facing trouble in providing sufficient 3G services to their customers given that the current channels are already full of traffic. The condition has prompted operators, including PT Telkomsel and PT XL Axiata, to request the government to put the 2.1 megahertz spectrum up for bids.
Muhammad Budi Setiawan, the director general for post and telecommunications at the Communication and Information Ministry, said that the 2.3 megahertz spectrum currently was the only technologically neutral spectrum.
“The regulators have made a small step. Hopefully, we can apply this to all spectrums, but of course, we will act prudently in applying whichever technology,” he said.
He added that the regulators were deliberating on applying technological neutrality to the 900 megahertz spectrum, which is currently used for GSM.
“We aim to realize this by this year or early next year, by the latest,” he said, adding that regulators had to consider the interests of various stakeholders before coming to a decision.
According to Setiawan, operators had to ensure that if the 900 megahertz spectrum was available for technological neutrality, operators using the spectrum had to guarantee keeping up the 2G GSM on this spectrum.
“If they suddenly switched to 3G, users of low-end, feature phones would loose connection to their services and would be forced to move to another operator,” he said.
Feature phone users outnumber smartphone users. Only 17 percent of the mobile phone market was in smartphones as of last year, the International Data Corporation (IDC) estimated.
“If these users lose service, they have to switch to handsets that support 3G and these handsets are still expensive because they are priced above Rp 1 million,” Budi said.
However, World Bank consultant Jan Van Rees said that 3G-enabled mobile phones are now more affordable.
“Technological developments have made them cheaper,” he said. “So people in rural areas can afford them.”
He added that implementing technological neutrality would facilitate broadband penetration in rural areas since operators were no longer required to build towers for mobile broadband. Operators only need to upgrade their equipment at existing towers to enable mobile broadband.
The government has targeted 30 percent broadband penetration by 2014, as part of the Mid-Term
National Development Plan.
“This is 50 percent to 70 percent cheaper,” he said, adding that the availability of broadband in rural areas would benefit the education and health care sectors by opening access to information.
Hans C. Moritz, director and chief technology officer of PT Indosat, said however that operators aimed to efficiently use the spectrum licensed to them.
“Rather than the technology itself, we are more concerned with deploying the technology that costs the cheapest for us and our customers,” he said, during a discussion on the subject held by Mastel.
News from the Jakarta Post