Editorial: Sensible Regulation Is Key to Connectivity
February 18, 2012
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Technology is the great agent of change in today’s world. It is also the great leveler, especially the information superhighway. Broadband Internet connectivity has proven in other countries to have opened new opportunities, especially for less privileged people.
In Indonesia, unfortunately, broadband Internet has not been fully utilized. Penetration remains low, with the high cost of providing the service leaving many Indonesians priced out.
And while in other countries governments have borne the financial burden of building the infrastructure, in Indonesia it is the private sector that has led the way.
That in itself is not an obstacle, because private companies have stepped up, but the government can play a bigger role in creating a more conducive investment environment.
With greater broadband Internet connectivity, economic activity will pick up. Analysts and industry experts have predicted that global e-commerce revenue will amount to as much as $963 billion by 2013.
In Indonesia, Frost & Sullivan has estimated that by 2015 revenue from e-commerce could reach $1.8 billion.
The potential for growth is therefore huge. But for the country to reap this dividend, user costs must be affordable, infrastructure must have sufficient capacity and the regulatory framework must keep up with the times.
At present, more than 94 percent of Internet connections are provided by telecommunications companies. New players offering high-speed and reliable wireless and 4G services are also entering the market, a development that will greatly enhance connectivity. Ultimately, Indonesian consumers will benefit, as well as corporations.
Therefore, there needs to be a greater focus on developing connectivity along with building roads, bridges and airports.
The existing wireless networks are overburdened and fixed lines do not have the capacity to carry data, a prerequisite for the growth of e-commerce.
The private sector has shown a willingness to invest in broadband wireless infrastructure. The government can and must aid this process by empowering the private sector and improving the investment environment by providing greater incentives. The whole nation stands to benefit.
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