As the world’s largest archipelago, Indonesia is not an easy place to deliver Internet services.
The rural areas that make up most of the country often lack any form of Internet connection. Even where there is a signal, few rural users can afford the cost of broadband.
Telecommunications companies charge much higher prices for Internet in rural areas, resulting in an increasing rural-urban divide in the country. While Indonesia’s 150 million potential users attract attention from tech companies, less than 20 percent of the country is online.
With support from the U.S. Agency for International Development, the government of Indonesia recently made a big step forward in changing this landscape. Indonesia’s National Broadband Plan, signed by former President Susilo Bambang Yudhoyono in September 2014, will enable an estimated $23 billion in investment in affordable, low-cost technologies to deliver Internet to underserved schools, local governments, rural health clinics and citizens at commercially viable prices.
About 140 countries, both developed and developing, have broadband plans. But very few are implementable and address the majority of the population’s needs. Indonesia’s broadband plan is exciting in that it provides a clear pathway to connecting rural communities.
The plan takes on four important reforms to do this:
1. Building the “Palapa Ring,” a high-capacity fiber optic cable network that will connect more than 400 districts and be shared by all telecommunications operators.
2. Using new, low-cost wireless technologies to connect the more isolated communities.
3. Allowing for regulations and licensing to permanently deploy low-cost technologies, such as television white spaces — the delivery of wireless Internet through unused TV frequencies.
4. Frequency management reforms that will allow for increased competition and permit a large number of public and private sector stakeholders to make free use of unused broadband frequencies.
Where we hope Indonesia's broadband plan can become a model for other countries, is its focus on facilitating investment. By putting the right policies in place and unlocking a small amount of funding from Indonesia’s Universal Service Obligation Fund — an explicit component of the broadband plan — the plan can incentivize large-scale private sector investment in rural broadband infrastructure.
Mobile network operators, Internet providers, and international companies such as Microsoft, Google, Intel and Cisco are all trying to expand Internet access in Indonesia. The private sector — international and local — is expected to provide 90 percent of the investment in building out Indonesia’s broadband coverage. This investment will help reduce the digital divide by getting inclusive Internet access to all levels in the socio-economic spectrum, not just wealthy consumers and institutions in urban areas.
The broadband plan’s potential impact is huge. It aims to connect 100 million Indonesians through sustainable services within the next five years.
This connectivity is crucial to USAID’s work to improve the lives of people living in poverty. Rural health clinics will have access to critical maternal care information. Farmers will be able to look up market prices or weather predictions. Local governments will be able to increase transparency and offer citizens easy access to forms and services. Environmental disasters resulting from a lack of communication services in isolated regions can be avoided, and educational services — previously unavailable — can be delivered to the most underserved communities.
Our work does not end once the infrastructure is in place. Around the world USAID is supporting new Internet users, particularly women, in the development of digital literacy skills. As our team discussed in a recent issue of MIT’s Innovations journal, Indonesians will need content relevant to them, in local languages, to make the most of new connections. For example, USAID’s mission in Indonesia is planning to work with the Ministry of Health to connect rural clinics to both broadband and critical Web-based health content. Providing content that meets these new users’ needs will build upon an affordable connection to help bring them into the digital economy.
Indonesia’s plan also matters beyond the country’s borders. Other countries are watching and learning from Indonesia’s example. Most of the lower Mekong countries, such as Cambodia, Burma, and Laos, are in earlier stages of their broadband strategies and are closely following the development of Indonesia’s plan. Indonesia can serve as an example of the impact a well-conceived broadband plan can have in jump-starting serious efforts to expand Internet coverage.
With its broadband plan, Indonesia is making strides towards widespread, affordable Internet access. This connection opens up new paths towards accelerating Indonesia’s digital future. Consumers can access more robust digital financial tools, government programs can improve social services with Web-based data collection and analysis, and Indonesia’s nascent entrepreneurial community can use a high-speed connection to develop homegrown digital solutions.
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