Will 5G Come to Stay?

It's already been four years since 5G networks arrived in various parts of the world. 5G is the fifth generation of wireless cellular technology. It offers higher upload and download speeds, more consistent connections, and increased capacity.

What is 5G?

Similar to previous cellular networks, 5G technology uses mobile sites that transmit data via radio waves. However, this new technology modifies the way data is encoded and significantly increases the number of usable airwaves for carriers.

The first three countries to have 5G networks were China, South Korea, and the United States (US). These countries launched their 5G networks in 2019 and have been developing the network ever since.

Midway through 2021, the 5G network was formally launched in Indonesia. Telkomsel was the first launcher, respectively, followed by XL and Indosat.

According to Telkomsel's website, people can already enjoy the provider's 5G network in several airports, such as KTT G20 Bali Airport and Soekarno-Hatta Airport. Telkomsel also provides a 5G network in some business and office areas, such as Kelapa Gading and Pondok Indah, DKI Jakarta.

Similarly, XL's 5G network has also covered several areas, including DKI Jakarta, Bali, Bandung, and Makassar, while Indosat's 5G network has been present in cities like Solo, Surabaya, Bandar Lampung, dan Bali.

Do People Really Use the 5G Network?

With low latency, the 5G network is developed to support new technologies, such as self-driving cars to virtual realities.

Although the 5G network has been around for a while, according to Strategy Analytics, only one out of every seven phone users possesses a 5G cell phone. Additionally, while the consumers have a 5G phone, they may not be subscribers to the operator's 5G network.

Even so, the global mobile operators' industry, like Apple and Nokia, doesn't appear to be deterred from creating new technology by 2030, specifically the 6G network, despite the lack of customers. Chief Development Officer of SK Telecom, Ha Min Young, however, seemed to be more cautious and stated that it is too soon to even "seriously talk about 6G."

The world appears to be pessimistic, but does Indonesia hold a similar opinion?

Counterpoint Senior Analyst, Febriman Abdillah said, in 2022, Indonesia's 5G cell phone shipments grew 62.2% YoY. In addition, middle-class smartphones (ranging from IDR 3-6 million) grew higher by 76.3% YoY.

Meanwhile, based on Counterpoint's Monthly Indonesia Smartphone Channel Share Tracker, shipments for the premium segment (ranging from Rp9 million and above) grew 21.2 percent YoY.

It indicates that Indonesians are interested in using a 5G network or a phone with more advanced technologies. OPPO and Samsung were the top two OEMs (Original Equipment Manufacturers) in Indonesia, according to Counterpoint data as well.

The most popular smartphone series purchased are OPPO Reno 7 5G, Reno 8 5G, and Samsung Galaxy A53 5G series. Consumers consider these phones as a cheaper alternative to mobile phones with powerful features.

OPPO and Samsung are certainly not the only mobile phone manufacturers preparing for the 5G network ecosystem. Nokia wasn't able to seize the global market in 2018 and 2019, but recently, the company has started to make up for the loss.

Nokia and Samsung were the two companies that gained the most radio access network (RAN) market share last year, according to data from Dell'Oro dan Omdia. In fact, Nokia was able to generate a full-year gross margin of 38.4% for its relatively new mobile unit along with a margin of 41% for the entire company by the end of 2022.

Furthermore, on top of its already established 5G phones unit (Nokia G60 and Nokia XR20), various sources have noted that the company may also release its Nokia 6600 5G Ultra in the third quarter of 2023.

Potential Contribution of 5G to the Indonesian Economy

Telkomsel Vice President Corporate Communications, Saki Hamsat Bramono, explained that Telkomsel is gradually and measurably continuing to develop 5G networks and services throughout Indonesia. In order to do so, Telkomsel is currently building collaborations with all stakeholders to strengthen the ecosystem for 5G technology utilization, especially for the B2B segment.

Telkomsel itself continues to forge partnerships with network providers Ericsson, Huawei, and ZTE in conducting research, trials, and implementation of the new 5G technology at the consumer and corporate levels. Other cellular operators, such as Indosat Ooredoo, XL Axiata, and Smartfren, also took a similar position.

Currently, the 5G network is deployed to strengthen network capacity if the 4G traffic load is overwhelmed in serving customers in the area. However, Chairman of the Indonesian Internet of Things Association (ASIOTI), Teguh Prasetya, said, "5G has a positive impact on economic growth in Indonesia, including supporting the development of IoT, AI, Big Data, and Metaverse."

Referring to research results from the Bandung Institute of Technology (ITB), the development of the 5G network in Indonesia has the potential to contribute more than IDR 2,800 trillion in 2030 or even jump to IDR 3,500 trillion in 2035.

The government itself participates in monitoring and providing access to the public regarding the 5G network development process through the 5Gnow.id digital platform.

The 5Gnow.id portal is a collaboration between the Ministry of Communications and Informatics with ASIOTI, Mastel, ALITA, ATSI, Telecom Infra Project, Hutchison, NPERF, ITB, ITS, Telkom University, Huawei, Ericsson, Nokia, ZTE, and Qualcomm.

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