This Year's Trend In Telko Operator Mergers Is Considered To Be A Positive Synergy For Consumers And Government

Illustration. (Photo: Doc. Antara)

JAKARTA - A number of records color the telecommunications world in 2021. One of them is the trend of mergers of a number of telecommunications operators. The business action is considered to be a momentum for accelerating synergies with government programs.

Mergers are also considered to have a positive effect in the form of increasingly healthy business competition and operational efficiency so as to benefit consumers at large, such as providing more affordable internet costs.

One of the government programs that can be synergized with the consolidation of telco operators is the signal independence program. The government has set a signal independence program which is targeted to be achieved by 2022.

In the signal independence program, the government seeks to provide telecommunications network-based internet services for 20,341 villages in the 3T area. In addition, the government prioritizes providing 4G signals, especially in the 12,548 villages and sub-districts that have not been reached.

Indef economist and Executive Director, Tauhid Ahmad, assessed that the merger in the telecommunications industry had a positive effect on the development of the ICT industry in Indonesia.

"This merger is expected to be able to make competition more healthy so that in the end it is consumers who will benefit from the improvement and development of the telecommunications industry," he explained in a written statement, quoted on Monday, December 27.

According to him, a merger is one of the best options to expand market share, improve technology and operational efficiency. Especially in the current era of digital disruption that emphasizes collaboration and synergy.

Tauhid highlighted that the telecommunications sector which is rife with mergers, including XL Axiata with Axis and Indosat Ooredoo with Tri, is the best choice to face the challenges ahead, especially 5G development. Another positive effect, said Tauhid, is that the merger will also make it easier for the government to supervise and synergize with the programs created.

"For example, equitable distribution of telecommunication and digital infrastructure is a government program. With the merger, the ability of providers has also increased to be able to build infrastructure such as towers and BTS as a result of the efficiency and additional capital power of provider companies. The hope is that they can build in areas- areas that have not been touched by a strong internet signal," he explained.

Meanwhile, Head of Investment Pacific Capital Investment, David Manurung assesses the rampant telco operator mergers are aimed at creating synergies that result in certain economies of scale, strengthening the capital structure, improving management and employee skills as well as creating expansion opportunities, both in product lines and market areas. unreachable.

"As we all know, the telecommunications service industry is a capital-intensive business. Companies must have endurance and strong capital to face high competition from their competitors. Likewise from a technology perspective. The telecommunications industry is an industry with a very fast technological life cycle. ," explained David.

"In order to provide excellent and consistent service to customers, telecommunication industry business players must continuously improve and update their services and technology, and this of course requires very large capital. Mergers between telecommunication companies are the answer for industry players to respond to capital needs high, creating an efficient cost structure as well as being able to be more competitive with its competitors," he added.

With the presence of 5G technology which was first launched in South Korea in 2019, according to David, this will be the main concern of telco operators in terms of market competition. The development of 5G technology will facilitate the development of services such as enhanced Mobile Broadband, Virtual Reality (VR) streaming, super fast internet access, telemedicine, video streaming with 8K quality, cloud gaming, autonomous cars and smart home monitoring.

"Well, to face the opportunities and challenges related to 5G development, of course telco operators must strengthen their capital and network structures, one of which can be achieved through mergers," he said.

In Indonesia, according to David, 5G technology was officially launched at the end of May 2021.

"With the merger strategy, telco operators can be more aggressive in 5G development throughout Indonesia. For example, the merger between PT Indosat Tbk and PT Hutchison 3 Indonesia will make Indosat's 5G technology even more solid thanks to the additional frequency from Hutchison 3," he concluded.