Bernama – Malaysia-Indonesia digital infrastructure partnership addresses 5G rollout concerns

KUALA LUMPUR, March 22 (Bernama) – The collaboration between PT Polytechnic Institute of Malaysia (PPIT) and Indonesia’s PT Polytechnic Institute of Indonesia (ASPIMTEL) marks an important step in addressing the digital infrastructure bottlenecks experienced in both markets, BMI said.

Fitch Solutions said the two associations, representing telecommunications infrastructure providers, signed a memorandum of understanding to strengthen cooperation between the two markets and “densify 4G digital infrastructure and new 5G networks.”

“The recent collaboration between Malaysia’s PPIT and Indonesia’s ASPIMTEL is likely to accelerate the development of new 5G infrastructure in both countries.

“We have previously noted that the outlook for capital expenditure for new 5G deployments in Indonesia is temporary and bearish, with local mobile network operators (MNOs) calling on the national telecoms regulator for an incentive scheme to speed up 5G adoption,” the company said in its industry trends analysis report.

According to the company, operators in Indonesia face rising deployment costs due to complex geography and a shortage of the latest generation of 5G semiconductors, and the partnership could help alleviate those challenges and provide a much-needed boost.

MNOs in both Malaysia and Indonesia are looking to 5G as a way to rejuvenate stagnant ARPU figures.

“However, the partnership is focused on upgrading and expanding 4G infrastructure, which could create an attachment to 4G technology with an expected 296 million subscriptions in Indonesia and 37.4 million in Malaysia by 2025,” he added.

BMI believes the partnership’s focus on infrastructure could lower the final price of 5G packages for consumers and improve adoption rates.

“However, significant price cuts are not expected as 5G is seen as a way to increase operators’ average revenue per user (ARPU).

“Furthermore, beyond affordability concerns, 5G deployment is expected to remain limited to urban areas, where tech-savvy consumers demand high-speed connections that support low-latency applications such as gaming and streaming,” it added.

BMI predicts that by 2032, Malaysia will have approximately 34 million 5G subscribers and Indonesia will have approximately 197.2 million 5G subscribers, accounting for 59.4% and 54.4% of the total mobile subscribers, respectively.

These figures suggest healthy compound annual growth rates of 31.3% in Malaysia and 39.4% in Indonesia from 2023 to 2032.

— Bernama

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