Analysis of Satellite Broadband Access Implementation in Indonesia Using Costing Methodology

Fixed broadband access infrastructure in Indonesia has not been able to reach 100% of remote villages and important public facilities such as schools, hospitals and community health centers as scheduled in the Indonesian Broadband Plan. Implementation of High Throughput Satellite (HTS) and subsidies for customer devices is a solution made by European Union countries and other countries to reach 100% of their territory. The Indonesian Government's HTS implementation is also believed to be a solution to reach remote villages and important public facilities. But building HTS and subsidies for customer devices is a new thing for the Government of Indonesia, requires huge costs and high risk costs. This study aims to assess the implications of the costs of implementing HTS and subsidies for customer devices. The cost model is used to determine the maximum satellite user capacity, total costs, and satellite service unit costs in implementing 7 Gbps and 65 Gbps HTS. The analysis shows that the Government needs to provide, in 10 years, an annual fee of Rp 1.47 trillion for 7 Gbps HTS, or Rp 3.97 trillion for 65 Gbps HTS. HTS 65 Gbps is able to serve more, a maximum of 675,000 users with a unit cost of Rp. 468,652 before subsidies and Rp 201,445 after subsidies. 7 Gbps HTS is only able to serve a maximum of 70,000 customers with a unit cost of Rp. 1,721,605 before subsidies and Rp 1,273,241 after subsidies. This study proposes, it is better to build satellites with greater throughput because they can produce smaller unit costs, of course if all the resources for building satellites are available. The government of Indonesia needs to find a Ka Band that can be used and pay attention to public policies for subsidies and funding sources to implement satellite broadband access. Further research is also needed to assess the business feasibility if the satellite will be operated.