- Local ISPs are up in arms against Starlink’s entry into Indonesia
- Indonesia Internet Service Provider Association has asked the Government to bar Starlink from selling satellite-based services in the country
- Indonesia is trying to balance between bridging the digital divide and protecting the interests of ISPs
Elon Musk’s satellite internet service, Starlink, is facing stiff resistance from Indonesian internet service providers (ISPs). The Indonesia Internet Service Provider Association is asking the government to ban Starlink’s license to sell services to consumers because ISPs see satellite provider as a threat to their market share.
The ISPs have invested heavily in setting up a terrestrial network. They believe that Starlink can make them redundant if it decides to reduce the tariffs to compete with the ISPs.
As of now, Starlink is charging significantly more than a typical ISP in the country. According to media reports, Starlink charges monthly fees of 750,000 Indonesian rupiah (around $45) and an initial cost of 5.9 million rupiah for an antenna. On the other hand, local ISPs charge 200,000 to 400,000 Rupiah per month for connectivity. However, since Starlink does not have to invest in deploying base stations, it can bring down the tariffs, which is bound to impact the ISPs.
Chairman of the Indonesia Internet Service Providers Association, Muhammad Arif Angga is reported to have said that foreign internet service providers can potentially “disrupt the sustainability and independence of the local ISP industry.”
Fierce Network’s request for comment to the association remained unanswered at press time.
Apart from Indonesia, Starlink operates in Malaysia and the Philippines in Southeast Asia. The provider launched satellite-based internet services in Indonesia on May 19. Originally, Musk launched satellite internet service for the country’s health sector, but the company received a permit to provide services to retail consumers as well. The company was welcomed by the Indonesian Government which sees Starlink as a precursor to a deeper engagement between Indonesia and Musk, leading to more investment.
A balancing act
Over 70% of Indonesia’s population is connected but the country faces challenges in connecting the remaining population. One of the key reasons Indonesia is struggling to provide quality internet in all parts of the country is its complex terrain. Indonesia’s population of 270 million is spread across 17,000 islands making it challenging to connect remote and rural areas. This makes satellite services extremely relevant to providing connectivity in yet-to-be-connected areas in the country.
The government is keen to support Starlink because it is focusing on boosting the digital infrastructure to accelerate the digitalization of enterprises. According to a report compiled by Google, Bain & Company, and Temasek, Indonesia’s digital economy’s gross merchandise value will grow from $109 billion in 2025 to $210 billion to $360 billion by 2030. The growing e-commerce and fintech sectors, coupled with the young population, are boosting the country's digital economy.
While satellite-based internet service providers, like Starlink, can potentially play a role in bridging the digital divide and boosting the country’s digital economy, the government wants to ensure that the ISP’s interests are protected.