Arief Yahya, President Director, Telekomunikasi Indonesia (Telkom): Interview

Interview: Arief Yahya

What progress has been made on the national broadband network and how are you overcoming the challenges of connecting the archipelago?

ARIEF YAHYA: Good progress has been made, despite the inevitable challenges of connecting a nation made up of thousands of islands. To build the infrastructure for the national broadband network, we have launched the Indonesia Digital Networks 2015 initiative. So far, true broadband has reached 8.6m home pass. We are building a digital ring spanning more than 75,000 km to serve as the network’s backbone, connecting all of the main islands. Most of this ring, about 68,000 km, has been completed and the Sulawesi-Maluku-Papua branch is expected to finish by 2015. At that point, the ring will reach about 85% of the population. Providing access for people in remote areas, however, remains one of the biggest challenges. Satellite will be needed to connect the rest of the archipelago, in the areas further away from the main islands. We are also looking to build more than 100,000 sq metres of data centres. This will support information and communications technology (ICT) in the country and facilitate innovation in both vertical and horizontal markets. A project of this magnitude has not yet been attempted, and since deploying new technology requires new skills and accurate planning, there are of course many challenges. One is ensuring that partners understand the new technology and are ready to set up the required components: previously market forces served as an effective driver, but to carry out a project of this scale we are now having to lead and facilitate this readiness. Another is site acquisition. In every deployment one has to secure the site and deal with licensing issues. To this end, we are partnering with various infrastructure owners across the nation to pool resources.

How much is the growth of data services in Indonesia driving revenue in the sector?

YAHYA: The greatest area of growth in the sector is currently in mobile data. While most revenue still comes from legacy services such as voice and SMS, these are in relative decline. In mobile, SMS is still growing at about 8% and voice is still seeing small growth as well. The price of these services, however, is decreasing, so we need to look elsewhere for revenue in the coming years. In Indonesia as in all countries, voice services for fixed lines are in decline as well. We expect data services, which are reaching about 27% growth, to compensate for decline in these older services.

This is why we are deploying broadband so aggressively. It will serve as a base from which innovation can grow. Broader penetration will have a big effect on Indonesia’s economy as a whole: a projected 10% growth in penetration could add 1.4% to the economy. Note, too, that much of the growth in mobile subscribers and data is outside of Jakarta – in Java, Sumatra, Bali, Sulawesi, and some of the larger cities in Kalimantan. This expansion of mobile data, such an important trend, is going on all around the country.

How competitive is the quality of Indonesia’s human capital in the ICT sector, especially with ASEAN integration around the corner?

YAHYA: To be truly competitive in the region, Indonesia must hurry to prepare a ready workforce in ICT. The opportunity is ripe: the nation has a fast-growing young population eager to contribute to the sector’s future. There needs to be an increased focus on education – especially secondary education – that will train the nation’s young and create a talent pool at international standards. Local companies are increasingly partnering with leading multinationals to develop the nation’s mobile and cloud services. Such partnerships are crucial to raising Indonesia’s ICT standards to a global level. Local firms also need to reach across borders to attract human capital from the region’s more advanced and saturated ICT markets such as Singapore and Hong Kong. I am optimistic that if these advances in education and global reach can be achieved, Indonesia could become one of the region’s leading players in ICT.