The Indonesian government has prioritized inclusive digital connectivity for the country’s economic prosperity. Despite Indonesia’s progress toward achieving inclusive digital transformation, the country faces a digital divide across its regions.

The ICT Development Index conducted by Statistics Indonesia (2021) shows a stark gap in access and infrastructure, ICT utilization, and ICT proficiency between the western part of Indonesia, specifically Java Island, and the most eastern parts of the country. The ICT development index in eastern regions such as East Nusa Tenggara and Papua is low, with scores ranging from 3.35 to 5.00 out of 10.00 (scores between 2.25-5.00 is categorized as low ICT development) for the years 2020–2021. In contrast, more developed regions — Jakarta and Yogyakarta — scored above 7.00, with Jakarta the only province scoring a high index of above 7.5. Absence of reliable, high-speed internet for the rural poor can exacerbate inequality. Attention to underdeveloped areas must be moved to the forefront of the government’s agenda so that inclusive digital transformation can be fully realized.

The Ministry of Communication and Informatics (MOCI) must reassess its current strategy to ensure accessible internet connectivity for underserved remote and rural areas of Indonesia. Government Regulation No. 46/2021 on Posts, Telecommunications and Broadcasting aimed to enhance private investment in the telecommunications sector. But issues with The Telecommunications and Information Accessibility Body (Badan Aksesibilitas Telekomunikasi dan Informasi or BAKTI), ICT infrastructure programs, and overlapping local regulations have affected telecommunications sectors’ ease of doing business and hampered ICT developments in underdeveloped regions.

Regulatory reform is called for to address issues found from the central to local level. From the supply-side, telecommunications operators are concerned with low return on investment for broadband penetration in underdeveloped regions. In terms of demand, rural communities struggle with the affordability of fixed broadband internet compared to mobile broadband.

Practices at the local government level further hinder ICT infrastructure developments due to unclear fees and complicated procedures for local levies and permits. This paper also highlights BAKTI’s shortcomings in transparency and collaboration with relevant stakeholders undertaking digital and ICT programs.

This paper provides recommendations on the expansion of high-capacity and high-speed internet through fixed broadband technology to the underserved rural regions (typically known as the frontier, outermost and least developed regions, or 3T regions). By drawing insights from a unique case study of Southwest Sumba District, this paper recommends 1) MOCI and BAKTI as digital leaders to formulate an Integrated Investment Roadmap through a participatory, bottom-up approach; 2) MOCI and BAKTI establish an ICT Working Group to improve collaboration and transparency; and 3) MOCI in coordination with relevant ministries to eliminate ease-of-doing-business barriers within local levying and licensing processes for the telecommunications sector by providing clear guidelines for local governments.