Indonesia will seek private investment, both from foreign and domestic investors, to develop the country’s digital infrastructure, as the COVID-19 outbreak has accelerated the digital transformation, Finance Minister Sri Mulyani Indrawati said on Tuesday. The government will seek more public-private partnership (PPP) schemes through the Communications and Information Ministry in a bid to speed up development, she
Indonesia will seek private investment, both from foreign and domestic investors, to develop the country’s digital infrastructure, as the COVID-19 outbreak has accelerated the digital transformation, Finance Minister Sri Mulyani Indrawati said on Tuesday.
The government will seek more public-private partnership (PPP) schemes through the Communications and Information Ministry in a bid to speed up development, she said. The investment will complement the government’s budget allocation of Rp 30.5 trillion (US$2.05 billion) in the 2021 state budget to develop the information and communications technology (ICT) sector.
“The development of digital infrastructure will not only use the state budget but also the PPP scheme between the government and private companies, both foreign and domestic,” she told reporters in a press briefing. “We will focus the development in regions that have not received connectivity services.”
The government is planning to build cellular base transceiver stations (BTS) in more than 5,000 locations next year, including in villages with no internet connection, she went on to say. “We will also build a national data system and digitize the education system, among other plans,” Sri Mulyani added.
Despite the large number of internet users, Indonesia’s internet penetration rate remains at 64 percent as of January, according to DataReportal, lagging behind neighboring Brunei, Singapore and Thailand, where internet penetration rates exceed 70 percent.
The Communications and Information Ministry said in June that approximately 12,500 villages in the country had no access to the internet. The combined investment from foreign and domestic investors in transportation, warehouses and the telecommunication sector rose by 6.26 percent year-on-year (yoy) in the January-June period this year to Rp 76.3 trillion from the same period last year, according to Investment Coordinating Board (BKPM) data.
Going forward, the Communications and Information Ministry will look for partners from the private sector, including foreign investors, to “create and launch satellites”, Sri Mulyani said, adding that these efforts would help open internet access to more Indonesians. Earlier this month, the government saw the preparatory work agreement signing of the $500 million Indonesia’s Satellite (Satria), which is funded through a PPP scheme and expected to be operational by 2023.
The signing was between PT Satelit Nusantara Tiga, part of the consortium of PT Pasifik Satelit Nusantara (PSN), and French-Italian aerospace manufacturer Thales Alenia Space (TAS). The satellite is expected to boost connectivity in the country and provide free internet access for 150,000 public facilities, including schools, regional government offices and healthcare facilities.
There are still many investment opportunities in the telecommunication sector, as the country requires a satellite capacity of around 900 billion bits per second (Gbps) by 2030, Communications and Information Minister Johnny G. Plate said on Sept. 2.
President Joko “Jokowi” Widodo announced his intention to aid digital transformation in public services and to improve the country’s connectivity inclusion during his annual state of the nation address on Aug. 14.
“The budget is to be used for accelerating digital transformation for governance and providing fast and efficient public services,” he said, referring to the Rp 30.5 trillion budget.
Jokowi added that ICT development would provide internet access to around 4,000 villages and subdistricts in Indonesia’s outermost frontier and least developed areas.
The Jakarta Post