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Indonesian Cellcos Request ‘incentives’ to Accelerate 5G

2023-11-20 14:05:00| Source:Commsupdate

Indonesian mobile network operators (MNOs), working in tandem with the Ministry of Communication and Informatics (MCI, or KemKominfo), have established a task force charged with coming up with new ideas and incentives to accelerate the implementation of 5G technology in Indonesia. 

IndoTelko writes that the task force is particularly interested in seeking a new formula ‘to balance technical, technological and financial issues’. Specifically, the financial red tape concerns the Non-Tax State Revenue (PNBP) derived from the 5G frequencies that will be allocated to MNOs.

Under the current framework, telecoms operators include frequency-related PNBP payments as ‘regulatory charges’ which are currently equivalent to 11%-12% of annual revenue (or 14%-15% if there are additional managed frequencies). However, the MNOs argue thatretain their profitability levels that figure needs to be capped at <10% and, as such, are requesting this incentive as part of the MCI’s ‘Draft Ministerial Regulation (RPM) concerning the Use of Radio Spectrum in the 700MHz and 26GHz Frequency Bands’. It is understood that the ministry is freeing up 90MHz of ‘digital dividend’ spectrum in the 700MHz band that was previously used for analogue broadcasting. Meanwhile, the 26GHz frequency band is currently still ‘idle’, so theoretically it could be used for mobile broadband.