Indonesia FTTH Association stages summit with Huawei to create FTTH ecosystem

Telecom Asia special projects team
05 May 2016

For all the recent excitement over 4G, Indonesia has also been remarkably active in the fixed broadband (FBB) space as the country’s communications service providers (CSPs) roll out FTTH networks. In October 2014, the Indonesian government issued its IBP (Indonesia Broadband Plan) that called for a $21 billion injection into Indonesia’s ICT construction, with the ambitious goals of providing 71% household penetration at 20 Mbps in the urban districts, 100% building penetration at 1 Gbps, and 49% suburban household penetration at 10 Mbps by 2019.

Eighteen months later, while progress has been made in the FBB segment, it’s simply not enough. Indonesia’s FBB subscriber base has only reached 4.3 million – that’s just 7% market penetration.

The Indonesia FTTH Association (IFA) is hoping to change that.

The IFA staged its first Indonesia FTTH Association Summit on April 27 in Jakarta, organized by MASTEL (Indonesia ICT Society) and IFA, supported by the Ministry of ICT and incorporation with PT Huawei Tech Investment (Huawei Indonesia). At the summit, the IFA welcomed 17 new members, including Telkom Indonesia, MyRepublic, Link Net, Jababeka and Huawei. The IFA – which operates under MASTEL – also pledged to boost development of a fixed broadband ecosystem that includes not just fiber deployments, but also development of Smart City and government initiatives such as e-government, e-education and e-health, as well as various other commercial services.

The summit brought together CSPs, government officials and key members of the FTTH ecosystem to share ideas and discuss how everyone in FTTH ecosystem can work together to develop FTTH infrastructure, boost digital service transformation and enhance industry chain cooperation to not only meet the IBP targets, but also underpin the government’s “Digital Economy Agenda” to transform Indonesia into the leading digital economy in the ASEAN region.

The emphasis on the ecosystem is key. The IFA is more than just an operator forum – it’s a collaborative force of policymakers, technology operators, industry and ecosystem leaders, standardization bodies and special interest groups committed to lead Indonesia’s ultra-broadband transformation. The basic goal of the IFA is to unify the overall ecosystem in order to spur development of the FBB market and “build a digital highway through FTTH to achieve a fiber-centric digital economy”.

The IFA aims to achieve that via a three-pronged strategy:

• Speed up fiber infrastructure coverage via market-specific fiber construction and deployment standards; broadband development maps and reports, which would include coverage, speed, and performance; fiber implementation skill training and discussion; and regulation and policies to promote FTTH construction
• Boost ICT digital services and businesses via business innovation cooperation (e.g. BOD, Smart Home, Smart City); digital services technology and standard discussions and suggestions (e.g. e-government, e-education, e-transportation, e-health); video experience (V-MOS), video performance, publication and monitoring
• Enhance industry chain cooperation via open discussion to identify common problems facing the Indonesia FTTH market and find suitable solutions; innovation and business cooperation; and development of a suitable mechanism that enables shared benefits for everyone in the ecosystem.

The IFA says it is taking a collaborative ecosystem-based approach to the problem in part because the biggest pain point in Indonesia’s FBB market is payment ability. In essence, FTTH deployments are capex-intensive, which often passed on to consumers. A collaborative approach is the most effective way to reduce costs (through mechanisms such as infrastructure sharing, for example) and provide the necessary economies of scale.

However, to date Indonesia has a FBB market full of players that have not cohered into a rapid-growth ecosystem. And despite the IPB plan, the Indonesian government has lacked a specific policy and standard measure of governance to help the market grow more quickly. The IFA will establish an organized mechanism to get everyone in the ecosystem on the same page.

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