Indonesia Satellite Communications Market Outlook to 2028

Indonesia Satellite Communications Market Overview

• The Indonesia Satellite Communications Market was valued at USD 339 million, driven by an increasing need for connectivity across remote regions. This growth can be attributed to government initiatives promoting digital infrastructure and the rise of sectors like e-commerce, which rely heavily on efficient communication systems in areas where traditional fiber-optic connections are not feasible.
• Major players in the market include PT Pasifik Satelit Nusantara (PSN), Telkomsat, Indosat Ooredoo, Thuraya, and SES Networks. These companies are instrumental in providing satellite solutions for various industries such as maritime, government, and defense. Each player is actively involved in expanding satellite capacity and coverage to cater to the growing demand for high-speed internet in Indonesia.
• The launch of the SATRIA-1 satellite, a government-backed initiative to boost internet connectivity across Indonesia's rural areas. With a capacity of 150 Gbps, the satellite aims to serve 150,000 public facilities, including schools and health centers, providing an immediate solution to the lack of high-speed broadband in rural communities. This initiative highlights Indonesias commitment to digital inclusion and reducing the gap between urban and rural connectivity.
• East Indonesia, with its scattered islands and remote terrain, is emerging as a dominant region for satellite communication services. The region's geographical challenges make traditional communication infrastructure unfeasible, increasing the demand for satellite services, driven by the high need for connectivity in areas such as Papua and Maluku.

Indonesia Satellite Communications Market Segmentation

The market is segmented into various factors like application, frequency band, and region.

By Application: The market is segmented by application into government, commercial, and maritime sectors. The commercial sector dominated the market by the need for reliable communication systems in industries like e-commerce and agriculture. With growing digitalization across these sectors, satellite communication provides essential connectivity solutions.

By Frequency Band: The market is segmented by frequency band into C-band, Ku-band, and Ka-band. Ku-band was the dominant segment with its offers higher bandwidth and faster data transfer rates, making it ideal for applications like broadband internet and video conferencing.

By Region: The market is segmented by region into North, South, East, and West. East Indonesia holds the largest share due to its remote and isolated locations that depend heavily on satellite communications for internet access.

Indonesia Satellite Communications Market Competitive Landscape

• Indosat Ooredoo: In March 2024, Indosat Ooredoo Hutchison expanded its partnership with Netcracker to support the rapid growth of its fiber-to-the-home (FTTH) subscribers, which surged tenfold after expanding its fiber footprint. The partnership aims to modernize Indosat's IT infrastructure and drive Indonesias digital transformation by bolstering broadband services, including fixed wireless access and home broadband.
• Thuraya: Yahsat is set to launch the Thuraya 4 satellite in Q4 2024, enhancing mobile satellite services across Europe, the Middle East, and Africa. This next-generation satellite will improve capacity, coverage, and resilience, supporting sectors like defense and logistics. Services are expected to commence by 2025.

Indonesia Satellite Communications Market Analysis

Market Growth Drivers

• Expanding Rural Connectivity: Indonesias satellite communications market is being driven by the need to connect 35 million rural citizens who lack reliable internet access. Satellite technologies offer a cost-effective alternative for regions with difficult terrain, especially in Papua and Maluku, where terrestrial infrastructure is not viable. This demand is increasing, fueled by government projects aimed at expanding digital inclusion across these regions.
• Rising Demand in Maritime and Fisheries Industry: Indonesias maritime sector, consisting of over 17,000 islands and 6 million fishing vessels, is a growth driver of satellite communication services. The maritime industry, which relies on real-time data and reliable communication systems for navigation and logistics, is increasingly adopting satellite solutions for enhanced operational efficiency. Satellite communication helps track and monitor vessels, ensuring better route optimization and improved safety.
• E-commerce Growth and Digitalization: The rapid growth of e-commerce, with an estimated 70 million online shoppers in Indonesia by 2024, is driving demand for reliable and fast satellite-based internet services, especially in remote regions. The Indonesian e-commerce sector's logistics and distribution networks require seamless communication, particularly in areas where terrestrial networks are either slow or unavailable. The government aims to support digital infrastructure through partnerships with private players boost connectivity for e-commerce.

Market Challenges

• High Operational Costs: The cost of satellite deployment remains a challenge for Indonesia's satellite communications market. With each satellite launch requiring an investment, this creates a financial barrier for private companies, slowing innovation and deployment rates. Maintenance costs are also substantial, impacting the operational efficiency of smaller service providers and stunting market growth potential.
• Technological Disparities Across Regions: Although satellite communications can bridge the gap between urban and rural areas, the technological infrastructure in various regions of Indonesia remains highly uneven. While urban areas benefit from advanced satellite technology, rural regions often lack the necessary infrastructure to fully leverage these solutions.

Government Initiatives

• Palapa Ring Initiative: The Indonesian governmentsPalapa Ring Initiativeaims to enhance digital connectivity across the archipelago. Completed in 2019, it involved a$1.5 billioninvestment to lay35,000 kmof fiber-optic cables, targeting500 regencies. The initiative seeks to boost internet access to90%of rural areas by2025, fostering economic growth.
• Indonesia Broadband Plan 2024: The Indonesia Broadband Plan 2024 aims to improve nationwide internet access through a combination of satellite and fiber-optic solutions. The government has allocated USD 1 billion to support the expansion of broadband services, particularly targeting 35 million underserved citizens. This plan promotes satellite communications as a critical solution for reaching remote areas and improving digital inclusion.

Indonesia Satellite Communications Market Future Outlook

The future trends in the market will witness growth in HTS, LEO constellations, government-backed initiatives, and satellite-based IoT applications across sectors like agriculture and logistics.

Future Market Trends

• Increased Use of High-Throughput Satellites (HTS): By 2028, the deployment of high-throughput satellites (HTS) in Indonesia will grow significantly, with several planned launches aimed at delivering higher data rates and better coverage. HTS solutions are expected to cater to the increasing demand for broadband services, particularly in remote islands and rural regions, where terrestrial infrastructure remains limited.
• Emergence of Satellite-Based IoT Applications: By 2028, Indonesia will witness a rise in satellite-based IoT applications for sectors such as agriculture, fisheries, and logistics. These applications will improve real-time monitoring, tracking, and data collection in industries heavily dependent on geographical distribution. Satellite communication providers will offer services aimed at optimizing operations, boosting productivity, and improving decision-making across the countrys archipelago.