The utilization of 5G technology has become a significant topic of interest in the technology sector, with the assurance of quicker connections and enhanced computing capabilities. However, prominent telecommunication companies in Indonesia are indicating that the deployment of 5G in the country is not an immediate priority.
These telecom firms assert that there is still a lack of demand for high-speed connectivity from both individual and enterprise customers. The utilization of advanced technologies such as autonomous driving, internet of things (IoT), artificial intelligence, and virtual reality is not yet widespread in Indonesia, making it challenging for telecom firms to justify the investment in 5G infrastructure.
Vivek Sood, the Group CEO of XL’s parent company Axiata, emphasizes that for individual users, the disparity between 4G and 5G connections is minimal, particularly since many individuals predominantly use connectivity for social media and video streaming. This raises the question of whether telecom firms can substantiate the higher cost of 5G connections to offset their substantial investments.
One potential alternative for telecom firms could be to target the enterprise market, which typically possesses greater purchasing power. However, there have been limited instances of 5G adoption by Asian businesses, with only China, South Korea, and Japan being exceptions. Sood elucidates that numerous corporate entities are hesitant to invest in the requisite software to fully leverage the potential of 5G technology.
Additionally, the requirement for 5G handsets, which are pricier than 4G devices, constrains the potential user base. As outlined by Sood, this lack of demand and the high cost of 5G handsets are contributing factors to the absence of urgency for telecom firms to advocate for the rollout of 5G in Indonesia.
The reluctance of prominent telecom companies in Indonesia to aggressively pursue 5G deployment is further attributed to financial obstacles and limited capacity for investment in new infrastructure. Consequently, despite the promises of 5G technology, the prevailing reality in Indonesia suggests that the market may not yet be prepared for its widespread implementation.
In conclusion, while 5G technology presents promising advancements, the dearth of demand for high-speed connectivity and the substantial investment costs are pivotal factors leading major telecom firms in Indonesia to adopt a cautious approach to its rollout. The future of 5G in the archipelago remains uncertain, and it appears that, for the time being, the focus will be on addressing the existing challenges faced by local providers.
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