Journal Article

Telecommunication access business model options in Maluku and Papua, the less-favored business regions in Indonesia

Kawano, Hirotaka, Oktarini, Lydia

2019

Overview

PurposeThis paper aims to provide feasible business model options that benefit all stakeholders; the government, the investor and especially the inhabitants in Maluku and Papua, the less-favored business regions in Indonesia.Design/methodology/approachThree feasible business model options result from ICT for development literature, current role of the government, other models and investment scheme review, statistical analysis, technology analysis and investment simulations.FindingsThis paper proposes three different feasible business model options. The infrastructure subsidy model, which combines 20 per cent private investment and 80 per cent government subsidy, is the most feasible business model based on investment simulations. This model which combines 20 per cent private investment and 80 per cent government subsidy provides stronger determination of Indonesian Government for serving rural and remote people. The revenue subsidy and the mixed project subsidy are alternative models that may provide more attractive schemes from the standpoint of investors.Research limitations/implicationsHowever, current paper has limitation which is subject to enhance for better analysis in future research such as implementation of the in-depth assessment of risk management system to deal with all exposed risks.Practical implicationsThis paper provides that setting up a complete telecommunication access infrastructures in eastern Indonesia is feasible under new proposed models.Social implicationsThe new proposed models provide stronger determination of Indonesian Government for serving rural and remote people and minimizing the digital divide in eastern area.Originality/valueUnder the new proposed models, the role and capacity of the government is adjusted. The government should dominate and be less dependent on private investment. Also, the government should shift from triggering service penetration into developing a complete infrastructure set up.

• Publisher: Emerald Group Publishing Limited
• Subject: Business / Business models / Cable TV / Cellular telephones / Communication / Communications networks / Communications technology / Construction costs / Design / Digital divide / Government / Households / Information technology / Infrastructure / Internet access / Investments / Investors / Islands / Penetration / Private investment / Quantitative analysis / Regions / Risk assessment / Risk management / Rural areas / Rural communities / Simulation / Statistical analysis / Subsidies / Technology assessment / Telecommunications