Refining Spectrum Fee to Increase Utilization Efficiency by Adopting ITU-R SM 2012-2 Case Study: Cellular Service in Indonesia

This paper reports on the development of the 5G spectrum usage fee in Indonesia. The fee was first applied in 2010 to charge mobile network operators (MNOs) that provided cellular services. However, cellular technologies have improved rapidly from 2G, 3G, 4G to 5G, and many modern innovative cellular services demand larger spectrum bandwidth. Therefore, the existing spectrum usage fee must be revised to meet the needs of the community better and to improve the efficiency and effectiveness of spectrum use. This study modifies the characteristics of the existing cost structure of the Indonesian spectrum usage fee, designing and proposing a new 5G spectrum usage fee model to support 5G technology usage scenarios and maximize the benefits of the midband (3.5 GHz), mmWave, or high band radio frequencies (26 GHz and 28 GHz). The new spectrum usage fee model includes spectrum-sharing parameters (non-orthogonal spectrum-sharing and orthogonal spectrum sharing) and private network to optimize the use of the available spectrum because the new proposing formula does not use the nationwide population, but instead, it uses the population within a specific area with both human and non-human (machine) populations. This new model is expected to help regulators prepare 5G technology regulations for application in Indonesia.

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A Proposal for Formulating a Spectrum Usage Fee for 5G Private Networks in Indonesian Industrial Areas

Hikmaturokhman

Ramli

Suryanegara

et al. 2022

Informatics

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The Indonesian spectrum usage fees—the so-called Biaya Hak Pengguna Frekuensi Izin Pita Frekuensi Radio (BHP IPFR)—are currently calculated using a formula determined by the three following main parameters: the frequency band, the country’s economic parameter, and the nationwide population. As spectrum usage fees are proportional to the width of the bandwidth, the current formula would result in an extremely high price when applied to 5G-mmWave private networks, with the cost burden being a direct consequence for the service operator. In this paper, we propose the formulation of a new spectrum usage fee for 5G-mmWave private network implementation in Indonesian industrial areas. To do so, we evaluate the current formula, adopt the framework offered by the ITU-R SM.2012-5 (06/2016), and use an industrial reference index—the Indonesia Industry Readiness Index 4.0 (INDI 4.0) score. We test the proposal by applying the new formula to calculate the 5G-mmWave private network spectrum usage fee for the Jakarta industrial area. The result shows that the new formula gives a lower spectrum usage fee than the current formula, which benefits 5G-mmWave private network service operators. Such savings can be regarded as a government subsidy for the service operators to use in various ways in the industry, providing further economic benefits. Using the input–output model, we prove that despite the proposed new formula brings a lower spectrum usage fee, resulting in a loss in state income, it will lead to a much greater positive impact on the national economic output. Applying the new formula will eventually have a multiplier effect on various sectors and encourage digital economic growth and national digital transformation, especially for vertical industries in Indonesia. This study may serve as a guideline or initial reference for Indonesian policymakers and service operators for applying the CAPEX and OPEX cost of using the new spectrum for 5G-mmWave private network service implementation and estimating the economic multiplier for 5G-mmWave private network service deployment in industrial areas. It can also be used as a benchmark case for other countries to apply spectrum usage fees for private networks in industrial areas.

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Refining Spectrum Fee to Increase Utilization Efficiency by Adopting ITU-R SM 2012-2 Case Study: Cellular Service in Indonesia

Cited by 3 publications

References 4 publications

Application Analysis of Bandwidth License Fee for Point-To-Point Microwave Link Radio Communication System

Application Analysis of Bandwidth License Fee for Point-To-Point Microwave Link Radio Communication System

On Developing a New 5G Spectrum Usage Fee Model for Indonesia

A Proposal for Formulating a Spectrum Usage Fee for 5G Private Networks in Indonesian Industrial Areas

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