Project Loon to ‘land’ in Indonesia amidst challenges

  • Trial with three operators to take off in 2016, no specific date yet
  • Despite possible benefits, potential regulatory hurdles ahead
Project Loon to ‘land’ in Indonesia amidst challenges

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GOOGLE Inc holding company Alphabet Inc’s Project Loon will be ‘landing’ in Indonesia after an agreement was reached with the republic’s three main operators – PT Telkomsel Indonesia, PT XL Axiata Tbk, and PT Indosat Tbk – to conduct a pilot trial in 2016.
Project Loon aims to serve up Internet access to under-served communities in the world, using solar-powered balloons placed in the stratosphere, above the flight paths of commercial aircraft.
The rollout in Indonesia was hailed by industry pundits, who nonetheless said there were challenges ahead.
According to Indonesia’s Minister of Communications and Information Technology Rudiantara, the pilot trial was part of the Government’s efforts to provide Internet access to remote areas in the country.
Project Loon is an alternative technology that promises to be economically and operationally suitable for Indonesia’s geographic conditions: An archipelago of thousands of islands and isles, with a huge population that is unevenly spread, said Rudiantara.
The pilot trial would also be in line with the Government’s ‘National Broadband Plan’ that aims to provide nationwide Internet access, he added.
The Project Loon agreement was announced during the Indonesian Government’s delegation to Silicon Valley, which included a visit to Google’s headquarters in Mountain View, California.
The visit itself was supposed to be part of Indonesian President Joko ‘Jokowi’ Widodo first official state visit to the United States, at the invitation of US President Barack Obama, but Jokowi had to cut short his trip to deal with the haze situation back home.
Rudiantara was an official witness to the signing ceremony between Alphabet president (and Google cofounder) Sergey Brin; Project Loon vice-president Mike Cassidy; Telkomsel chief executive officer (CEO) Ririek Adriansyah; XL Axiata CEO Dian Siswarini; and Indosat CEO Alexander Rusli.
Under the agreement, the Loon balloons will be placed at an altitude of about 20km above sea level, and will transmit Internet signals using the 900MHz frequency owned by Indosat, XL Axiata and Telkomsel.
Project Loon saw its first trial in New Zealand in June 2013, and a subsequent one in Brazil. In Indonesia, during the first year of the trial, Internet access will be fully controlled by the three operators via their backbone infrastructure.
Thumbs-up for Loon

Project Loon to ‘land’ in Indonesia amidst challenges

Internet connectivity in Indonesia is not evenly distributed, which is why the Government is looking at Fourth Generation/ Long-Term Evolution (4G LTE) mobile technology to reach the 100 million Indonesians who are not yet connected, according to IDC Indonesia country manager Sudev Bangah.
The agreement to bring Project Loon to Indonesia is a rational step given the fact that 25 million smartphones are shipped into Indonesia every year, he said in an official statement obtained by Digital News Asia (DNA).
However, Sudev also noted that one important aspect of the Government’s drive would be to raise awareness among the people of the usefulness and benefits of Internet access.
“Ordinary people who are [yet] untouched by connectivity might ignore the availability of Internet access – they would be more concerned about the Government building physical infrastructure like roads and bridges, or public transportation, than invisible infrastructure like connectivity,” he said.
“The main thing now is how [Project Loon] can bring business effects to villages, and attract the attention of the wider community – that is, how to make sure Internet access brings the people a better quality of life,” he added.
However, while acknowledging the challenges ahead, Communications and Information Technology Ministry spokesman Ismail Chawido said the pilot should be viewed as a research project.
“This cooperation is like research, especially for areas which operators find difficult to reach like Kalimantan and Papua,” Ismail told DNA on Oct 29.
According to Ismail, the one-year-long trial will be carried out in 2016, but he could not confirm the exact date it would kick off.
No commercial agreement
Meanwhile, in an official statement, Telkomsel’s Ririek said there is no commercial agreement between Alphabet/ Google and the operators.
However, during the trial, the Indonesian Government and operators would learn more about the sophisticated technology behind Project Loon as a means of providing Internet access to remote areas, he added.
XL Axiata’s Dian concurred, saying in an official statement that the “commercial process would take at least two to three years after the trial, at the soonest.”
However, she also did not rule out the possibility of further collaboration in the future.
The Communications and Information Technology Ministry’s Ismail stressed that there has been no discussion on the business aspects.
“After the trial, we will evaluate the business possibilities,” he said, adding that for there to be mutually-beneficial cooperation, the most important aspect would be the benefit to consumers.
Benefits for telco industry

Project Loon to ‘land’ in Indonesia amidst challenges

Indosat Public Relations Division head Adrian Prasanto however argued that in the long-term, the cooperation with Project Loon would not only enable access for the underserved, but also benefit the telecommunications industry in Indonesia.
“If the trial in 2016 is successful and later goes commercial, it certainly will increase customers and income for operators,” he said.
According to Adrian, any commercial cooperation, if there is one, will not be much different from the one Indosat has with Facebook Inc’s initiative: In this case, Google will help operators provide Internet access in remote areas.
“Facebook and Project Loon have approximately the same goal, which is to enable Internet access. About the possibility of other benefits, we are not yet at that stage,” he said.
XL Axiata director and chief management officer Ongki Kurniawan said the other benefit is to reach people who have so far been unreachable by telecommunication operators.
“From XL’s viewpoint alone, currently around 20% of the total Indonesian population or approximately 50 million people are still unreachable.
“If the trial is successful and is followed by cooperation, certainly there will be more people who can get Internet access for their needs,” he said. 
Regulatory and spectrum issues

Meanwhile, the Indonesian Telecommunications Regulatory Body (BRTI) noted the ongoing issues with Project Loon in terms of safety, aviation regulations, and national security.

In 2013, The Atlantic reported that “the proposed delivery system has thus far escaped similar scrutiny, which is too bad, because the very mechanics of Project Loon highlight serious legal, diplomatic, and government tensions, which Google is either ignoring, unaware of, or operating in spite of.”

Among these issues are the spectrum Project Loon uses; arguments that the balloons are more akin to unmanned aerial vehicles (UAVs) or drones and should be regulated as such; as well as the sovereignty of airspace above a nation, even at that high altitude.

BRTI’s I. Ketut Prihadi told DNA that there is a need to look into issues such as the safety factor, aviation regulations, and Indonesia’s security.

“The Government will have to study whether Project Loon can fill the gap in telecommunications access, or whether it is possible for telecommunication operators to work together to build infrastructure in remote areas,” he said.

In terms of the 900MHz frequency being used by the three operators for Project Loon, BRTI member Imam Nashirudin said that Indonesia’s current telecommunications regulations do not allow operators to rent out the frequency they own to other parties.

“Based on current regulations, operators are not allowed to rent frequency, even it is for beneficial purposes.

“This cooperation with Project Loon must be studied further, especially with regards to current regulations and whether it may harm aviation or state security – in essence, if it threatens the country,” Imam said.

Before the agreement to use the 900MHz frequency owned by the three operators was reached, Google had actually asked permission to use the 700MHz frequency allocated for analogue television.

The use of the 900MHz frequency instead must be studied and discussed further, even if it is for the purposes of this pilot trial, according to Imam.

“Even in the trial we have to know where Google will be flying the balloons. We have to make sure the location is safe, in an island where there is no cellular phone coverage, with a small population and not so many flights, such as Papua,” he said.

Besides the use of the 900MHz frequency, the Indonesian Government and the three operators must pay heed to the privacy and security of users’ personal data, Imam argued.

He noted that Indonesia is drafting legislation on personal data protection, a process expected to be completed by November.

Imam called on members of the public to scrutinise the personal data law, especially with regards to the Project Loon pilot trial and any commercial agreement thereafter.

“Although it is B2B (business-to-business) cooperation, Project Loon could have an impact on other industries such as military and aviation, and therefore the state must intervene,” said Imam.

“If later there are plans to commercialise Loon with the operators, we will call the operators and Google for further discussions because it is a business, and again, it is about user data protection,” he added.

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