Local ISPs deliver inferior experience in Indonesia compared to the major ones

Andrey Popov, Robert Wyrzykowski

In this report, Opensignal takes a deeper dive into the experience of our fixed broadband users in Indonesia, to see how the experience differs depending on the type of Internet Service Provider (ISP) they subscribe to. 

Segmentation used in the report:

• Major ISPs: ISPs with larger subscriber bases and more extensive infrastructure footprints, often available nationally.
• Local ISPs: Smaller regional ISPs, with targeted customer bases and localized geographical reach.

Key findings:

• Indonesia sees one of the highest gaps in Broadband Consistent Quality between major and local ISPs among the observed countries.
• Indonesian users who subscribe to local ISPs struggle to achieve decent and consistent fixed broadband connectivity on their existing plans, partly due to the pricing strategies.
• Fixed broadband connectivity is becoming increasingly present in Indonesia, with our users in East Java spending the most time connected to Wi-Fi. 

Opensignal compared the experience of our users for three metrics, across 20 broadband markets and how it varied between major and local ISPs. Broadband Consistent Quality measures how often a network, from the perspective of a single device once connectivity is established, meets the requirements for common applications (e.g. watching HD video, completing group video calls, and gaming across all hours of the day), as represented by the percentage of successful users’ tests.

Universally, we’ve observed that our users on major ISPs generally have more consistent experience on their fixed broadband when using major ISPs’ networks, than in the case of local ones. However, the gap is especially wide in Indonesia — reaching 17.2 percentage points. This difference is even more staggering when we take into account that Indonesia has the lowest Broadband Consistent Quality scores across the analyzed markets, both for major and local ISPs, with the latter segment significantly lagging behind local ISPs’ scores in other markets. 

Several factors can explain why larger ISPs would provide a better and more consistent fixed broadband experience for their subscribers. They have resources to invest in high-quality infrastructure, like faster data centers and advanced traffic management technologies, while also leveraging economies of scale and signing peering agreements with other networks. This results in faster speeds, lower latency, and the capacity to handle a high number of users without congestion, especially during peak times. Their large scale also allows for building in more contingency to deal with potential outages, with more data centers available and larger teams responsible for network monitoring. While local ISPs can provide a more localized or customer-focused approach, they often have to lease bandwidth from bigger players, which can lead to a limited experience for their customers. 

Opensignal’s Broadband Consistent Quality metric uses six key performance indicators: download and upload speeds, latency, jitter, packet loss, and time to first byte, setting thresholds appropriate for individual rather than multiple device usage. Metrics represent the percentage of users’ tests meeting these performance thresholds to support activities like watching HD video, completing group video calls, and gaming across all hours of the day.
 

We analyzed one of these six components — Download Throughput. The scores reflect how many tests passed the ‘‘good enough’ threshold of at least 5Mbps of broadband download speed — which is sufficient to stream HD video from any of the most popular streaming services like Netflix or Youtube), without the transmission feeling sluggish. In the analysis, we focused on the percentage of failed tests.

The aggregated score for the local ISPs in Indonesia for this metric is 37.1% — which is significantly higher than in the case of larger ISPs in this market (18.8%), but also substantially higher than for the local ISPs segment across other markets. This means Indonesian users subscribed to local ISPs struggle with achieving decent and consistent fixed broadband connectivity on their existing plans. 

A key factor behind this is the pricing strategy employed by local ISPs in Indonesia, which often focus on offering lower-speed plans at more affordable rates. This pricing model directly impacts the overall average user experience. Opensignal’s measurements, however, reflect the actual experience of users across all speed tiers, regardless of the specific plan they have purchased from their provider. As such, this report provides an accurate analysis of the real-world performance across all user plans, delivering a comprehensive view of network quality.

Indonesia is a country with a large number of mobile-only users who have never connected to fixed broadband services. One in five of Indonesian mobile users never connected to the internet over Wi-Fi, while 22.5% connected to Wi-Fi services very rarely (less than 10% of the time), as our analysis published last year demonstrates. However, more mobile users are getting access to Wi-Fi services across the country and spend more time connected to fixed broadband services. We can observe a shift in time spent on Wi-Fi — which has increased from 33% in Q1 2022 to 37% in Q3 2024 nationally. 

The reliance on Wi-Fi services varies heavily across the country as well. Our users in some Indonesian kabupatens (regencies) spend less than 30% of their time on Wifi, mainly in Sumatra, Sulawesi, or across the Maluku Islands. Meanwhile, kabupatens in east Java spend an especially high percentage of time on Wi-fi, often exceeding 50%. Accordingly, the access to reliable fixed broadband internet connectivity is becoming increasingly crucial in Indonesia.

While local ISPs can sometimes offer a more localized or customer-focused approach, the advantages of scale and infrastructure often make larger ISPs the better option for faster and more reliable internet services, which are crucial for meeting Indonesia’s growing digital demands. Smaller cities and towns, along with rural areas would have much wider gaps between these two segments. The inconsistent quality of rural connectivity hinders economic development in these areas. Improved broadband infrastructure in rural regions will drive productivity, unlock new opportunities, and reduce socio-economic disparities across Indonesia. A decent level of internet connectivity in rural areas can boost productivity and unlock new work and education opportunities for local communities, while also narrowing socio-economic gaps between Indonesia’s regions.

The Indonesian Ministry of Communications and Informatics is keen on setting the minimum fixed broadband speed at 100Mbps for the country, to catch up with other Southeast Asian markets in terms of the quality of fixed broadband services. Some of the major ISPs are ready to offer such speed tiers, at least to part of the population. 

However, as our analysis demonstrates, our fixed broadband users in Indonesia receive lower Quality of Services and Quality of Experience, as measured by Broadband Consistent Quality, when subscribing to local ISPs. Meeting the 100Mbps download speed requirement would be a major challenge for them, especially when they struggle to meet the threshold of at least 5Mbps, which is “good enough” for most common applications and use cases, as our analysis demonstrates. A focus on delivering strong QoS and QoE is vital for Indonesia’s digital growth, as reliable connectivity is central to economic and social development, and the country risks lagging behind regional peers.

Smaller ISPs, including some resellers and unlicensed providers, may offer more affordable options but often face challenges in delivering the quality of service required, particularly in rural areas. Ensuring affordable yet high-quality service remains critical for sustainable digital development. Kominfo lists more than 1,300 ISPs in Indonesia — but this register doesn’t include many providers operating without a license, so the number of small local players is likely to be much greater. This dynamic can challenge efforts to enhance the country’s fixed broadband experience, as it may reduce the incentives for larger ISPs to invest in modern infrastructure. Ensuring that all providers meet minimum quality standards, while balancing affordability, is essential for driving Indonesia’s broadband development forward.

Please read our most recent reports to learn about the experience of our Indonesian users on fixed broadband services in Java and in Indonesian cities. For further insights and a deeper analysis of Indonesia and other global markets, subscribe to Opensignal’s newsletter.