Indonesia's Satellite Operators Invest Selectively Amid Exchange Rate Pressures and Starlink
Domestic satellite operators in Indonesia are tightening their operations and becoming more selective in committing new investments as of Thursday, 21 May 2026. The efficiency measures are driven by a double squeeze: the rupiah’s weakness against the US dollar and the massive expansion of foreign satellite internet service providers such as Starlink.
The increasingly competitive market is forcing local operators to adjust their business strategies to safeguard profitability. High operating costs denominated in dollars are not commensurate with price pressures in the domestic retail market.
Most components for the construction, launch, and maintenance of satellites require funding in US dollars. When the rupiah weakens, capital expenditure burdens automatically grow substantially for local players.
Conversely, Starlink’s entry into Indonesia brings large-scale technological disruption. The low Earth orbit satellite service offers high speeds with low latency directly to end consumers.
This competition has intensified after concerns about pricing strategies in the market emerged. The government continues to monitor the movements of global operators to ensure fair business conditions.
Regarding the potential for internet selling at loss or predatory pricing by foreign satellite internet providers, Wayan Toni Supriyanto, Director General of Posts and Informatics Administration at the Ministry of Communications and Information Technology (Kemenkominfo), issued a firm statement: “Kemenkominfo has begun scrutinising Starlink to ensure there are no predatory pricing practices that harm the local telecommunications ecosystem.”
Strategies for Local Operators to Survive
To confront this situation, domestic telecommunications companies are now opting to maximise existing infrastructure rather than construct new assets. The primary focus is redirected to market segments not yet reached by terrestrial fibre networks.
Strategic partnerships have also become the primary option to widen reach without overburdening company balance sheets. The concept of Joint Operating Arrangements (Kerja Sama Operasi) is now widely adopted by domestic bandwidth providers.
The following is a comparison of investment focus between local satellite operators and foreign satellite service providers in the Indonesian market today:
The following is a comparison of investment focus between local satellite operators and foreign satellite service providers in the Indonesian market today:
Through this mapping of strategies, local players are endeavouring to secure corporate market niches that require services with strict regulatory assurances. The move is seen as safer in mitigating global financial risks.
Regulations Related to Foreign Operations
Indonesia has in fact imposed a number of restrictions on foreign satellite operators wishing to enter the domestic market. One example is the requirement to establish interconnection cooperation with local telecommunications operators.
Interconnection schemes aim to ensure data traffic from foreign satellites remains routed through domestic network gateways. This is important for safeguarding digital sovereignty and national data security.
Some key regulatory points that foreign satellite operators must meet include:
Must establish a legal entity or appoint an official representative in Indonesia.
Must interconnect with local operators such as Telkom Group.
Must comply with all tariff terms and landing rights stipulated by Kemenkominfo.
Must guarantee the protection of consumers’ personal data in accordance with applicable law.
This tightening of oversight is expected to provide space for domestic satellite operators to calibrate their business. Adjusting capital expenditure strategies is seen as a key for local telecommunications corporations to survive amid global economic uncertainty.