Starlink Faces Opposition from Indonesian Telecoms Sector
Starlink's arrival into Indonesia has sparked hostility from the local telecoms sector, which regards it as a danger to its market dominance. While the government is supportive of Starlink's presence, there are concerns about overreliance on foreign carriers and potential disruptions to the local ISP market. Starlink's inexpensive price and ambitions for direct smartphone internet connectivity make it a viable competitor to both fixed-line providers and mobile carriers.
Starlink, a satellite internet service supported by Elon Musk's SpaceX, has faced opposition from the Indonesian telecoms sector despite a warm welcome from the government. While the government recognises the potential benefits of Starlink's introduction into the country, telecom companies regard it as a danger to their market dominance.
The Indonesia Internet Service Provider Association has requested for a suspension of Starlink's licence to sell consumer services until clear restrictions are enforced. Chairman Muhammad Arif Angga expressed concern about an overreliance on foreign internet service providers, which could jeopardise the local ISP industry's sustainability and independence. Starlink, which is known for providing high-speed communications via thousands of satellites in low orbit, aims to bring internet to places with limited access.
Elon Musk stated his excitement about the possibility of allowing anybody with internet access to learn anything they wanted. Indonesia becomes the third Southeast Asian country, after Malaysia and the Philippines, to provide Starlink consumer services. President Joko "Jokowi" Widodo even met with Musk following the launch, showing the government's interest in possible investments from Starlink, such as a SpaceX rocket launch site and a Tesla electric vehicle plant.
Budi Arie Setiadi, Minister of Communication and Information Technology, stated that Starlink does not receive special treatment from the government. He emphasised that Starlink's market share in the United States and Australia is less than 1%, and its overall impact on the communications industry is minimal. Starlink's pricing competitiveness in Indonesia is currently low, and demand will be limited to places with weak connectivity.
The monthly rate for Starlink's services is 750,000 rupiah ($45), with an additional 5.9 million rupiah for an antenna. In comparison, local operators charge between 200,000 and 400,000 rupiah per month for comparable network speeds. However, in nations where Starlink has been functioning for some time, prices have constantly decreased.
Additionally, the company intends to offer a service that allows direct smartphone internet connectivity without the use of an antenna. This move would position Starlink as a competitor to both fixed-line internet providers and mobile carriers. One feature of Starlink is its capacity to cross borders without the requirement for base stations in each country.
This advantage, along with Indonesia's hard topography and the requirement for significant expenditures in ground-based communication networks, provides Starlink a distinct advantage. According to Investment Minister Bahlil Lahadalia, SpaceX's Indonesia office now has only three staff and a total investment of 30 billion rupiah.
With a population of over 270 million people distributed across 17,000 islands, Indonesia poses considerable hurdles for establishing a comprehensive ground-based communication network. Satellite communications, such as Starlink, provide a practical way to connect remote places with little infrastructure. Some participants in Indonesia's telecommunications industry feel that Starlink can help with the construction of a national network.
Starlink's entry into Indonesia has faced opposition from the local telecoms sector, which sees it as a threat to their market share.
While the government supports Starlink's presence, concerns about overreliance on foreign providers and potential disruptions to the local ISP industry have been raised.
Starlink's competitive pricing and plans for direct smartphone internet connectivity position it as a potential rival to both fixed-line providers and mobile carriers.
Source: NIKKEI ASIA