Operators Cry ‘Sky’ Rentals Are Increasingly Expensive, Income Loses Tech – 19 hours ago

Jakarta, CNBC Indonesia – Cellular operators complain that frequency rentals are increasingly expensive. Unfortunately, this price increase was not followed by an increase in operators’ income.

“Operator income is no longer growing as high as in the past. Currently it is growing at around 5.6% on an average growth basis. Even though BHP’s growth frequency is more than 10%,” said Deputy General Chair of ATSI, Merza Fachys, in the discussion 700 Mhz and 26 Ghz Spectrum Auction, Efforts to Encourage 5G PenetrationJakarta, Monday (13/11/2023).

He also suggested that the regulatory charges charged should not be too high. It should be just under 10% to make the telecom industry healthy.

For your information, there are many components to regulatory charges. One of them and the biggest is related to frequency.

In the GSMA report entitled “Sustainable Spectrum Costs to Strengthen Indonesia’s Digital Economy”, the increase in frequency spectrum costs has reached 12.2%. Meanwhile, the regional average in Asia Pacific and globally is 8.7% and 7%.

Total annual spectrum costs are also estimated to have increased more than fivefold in Indonesia since 2010. According to the GSMA, this is due to auction fees and permit renewals.

“In contrast, industry revenue growth is not in line with average revenue per cellular service user, which decreased by 48% during the same period (in USD). In addition, the annual adjusted frequency spectrum costs continue to increase due to inflation,” wrote GSMA in its report.

Meanwhile, Merza also touched on the imbalance in income with the increase in traffic. Over nine years, data traffic has increased by 80%.

“High traffic grows by an average of 80% from 2013-2022. It doesn’t grow operator income in a balanced way. So it’s 5% compared to 80%. What has to be borne is that the income becomes stagnant,” he said.

[Gambas:Video CNBC]

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