Still Buffering
    Category: E-Gang By : Ardian Wibisono and Yessar Rosendar Read : 1594 Date : Monday, February 17, 2014 - 01:02:06


    Business at Internet service provider PT Internux is growing so fast that new recruits have no place to sit in their offices, and have taken to standing outside in the hallways, waiting for their turn to go inside for briefings. Inside the office, the walls are covered with giant maps of greater Jakarta, stuck with colored pins showing network coverage.

    The fast pace of the office matches its offering: a superfast mobile Internet service, under the brandname Bolt, with fourth generation (4G) connections that promise up to 72 Mbps, or 10 times the speed of the current 3G services. Known as a Long-Term Evolution or LTE service, Internux is the first commercial LTE offering in the country, although for now it is available only in Jakarta and satellite cities such as Bogor and Bekasi.

     “We are getting a good response from the market, there are over 5,000 activations per day since we launched at the end of December and we are looking at a potential market of 10 million customers,” says Devid Gubiani, chief technology officer at Internux. The company, a unit of Lippo Group, plans to invest $550 million into building infrastructure.

    The catch? The service operates at 2,300 MHz, which is not accessible by mobile phones. So to access it, users typically need to tap into a WiFi dongle. That said, having LTE up and running is a significant milestone for wireless development in Indonesia; this is because many countries in the region have already implemented the technology. Fixed broadband remains a rarity in Indonesia, with a penetration rate of about 1.6% of households, or 800,000 homes, according to eMarketers research. This is because many in Indonesia simply can't afford it.

    LTE also makes more efficient use of frequency, as it delivers almost twice of data of 3G technologies. From an industry perspective, the shift to LTE provides hope for new business for the cellular companies, as the voice and text markets have matured. Data services is expected to become a future revenue generator. However, current technology tends to give customers an unpleasant experience so they limit their use of mobile data.

    With fast Internet access, habits change. People would be keener to watch and download video content especially high definition ones that require fast connection and consume more data. LTE users on average consume 1.5 gigabytes of data per month, almost twice that of 3G users, according to GSMA Wireless Intelligence research. LTE users in other countries where the service is available generate higher average revenue per user (ARPU) by 7 to 20 times. One example is Korean cellular firm LG U+, which in the third quarter last year recorded a 25% increase in ARPU compared to the same period three years ago, with 56% of its subscribers now using LTE.