Indosat director & chief operating officer Vikram Sinha said that, by phasing out 3G, the company could reallocate more spectrum bandwidth for 4G services in staying ahead of an expected growth in domestic demand for faster internet connection.

The company’s 3G base transceiver station (BTS) count fell more than 22 percent annually to 35,000 units in the first half (H1) of this year while its 4G BTS count rose more than 30 percent to 69,000 units over the same period, according to Indosat data.

“4G will become very relevant, and it will be the growth momentum for many months and years to come. But 3G, we want to slowly shut down and make sure that we move to 4G and 5G,” Sinha said in an online press conference on Thursday.

Company data show a significant increase in 4G data subscription of 29.5 percent to 40 million in H1 compared to last year, while mobile data revenue rose 18.9 percent to Rp 11 trillion (US$761.5 million) in the same period.

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Indosat began phasing out 3G last year when it began reducing its 3G BTS count starting in the second quarter of 2020, according to documents filed with the Indonesia Stock Exchange (IDX).

Expanding its 4G service is part of Indosat’s three-year turnaround strategy to undo a Rp 2.43 trillion net loss booked in 2018 amid tightening competition with PT Telekomunikasi Indonesia (Telkom) and PT XL Axiata. The trio are Indonesia’s top three telco firms with Telkom as the largest among them.

Indosat also sold off 4,200 telecommunication towers and launched its first commercial 5G service this year to improve its performance. The service is currently targeted at consumer uses like online gaming, high-definition video streaming, augmented reality (AR) and virtual reality (VR).

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However, Indosat’s 2G BTS count still inched up by 2,000 units to 29,000 in the first half of this year to serve the harder to reach parts of Indonesia. The company is still 14.29 percent owned by the Indonesian government.

Sinha said the company did not expect to dismantle or install new equipment but only upgrade its software over the course of its shift to 4G and 5G, which would minimize costs.

In the long-term, he continued, the company planned to expand its 5G services beyond the consumer market into the micro, small and medium enterprises (MSMEs) market.

“When it comes to 5G we will talk about solving problems in our country and community, which 5G can do. We want to challenge everyone on how 5G can support MSMEs, industrialization or industry 4.0,” he said.