Huawei’s dominance in Indonesia raises digital colonization concerns

Ahmad Syamsudin for BenarNews and Chen Mei Hua for RFA Mandarin
2023.09.27
Toba, Indonesia
Huawei’s dominance in Indonesia raises digital colonization concerns Customers look at Chinese-made laptops displayed at a retail shop in Bandung, Indonesia, July 15, 2023.
Gemunu Amarasinghe/RFA Photo

BRI-logo-black-background-250.jpgLush green hills and a majestic lake surround a private university here that is training tomorrow’s elite Indonesian digital workers with help from a Chinese technological powerhouse viewed with distrust by the U.S. government.

The Del Institute of Technology, or IT Del, founded by a key aide to Indonesia’s president, has been collaborating since 2013 with Huawei, China’s leading tech company. 

Through the partnership, faculty members and students have access to cutting-edge training, certification and research opportunities in fields such as cloud computing, artificial intelligence and cyber security.

“It’s a win-win situation for Huawei and us,” Humasak Simanjuntak, IT Del’s deputy president, told BenarNews, a news network affiliated with Radio Free Asia. “One of the ways they achieve success is by supporting education in Indonesia.”

Indonesia has welcomed Chinese investment to develop its digital ecosystem. IT Del was founded by Luhut Pandjaitan, Indonesia’s coordinating minister for investment and maritime affairs, and its top official coordinating cooperation with China.

Huawei’s interaction with Indonesia is part of China’s broader strategy of expanding its economic and political influence across Asia and beyond through its Belt and Road Initiative – a global infrastructure, technology and investment program launched by Chinese President Xi Jinping 10 years ago.

That includes developing digital systems, which Jakarta views as key to future prosperity. Indonesia’s internet economy is projected to reach US$124 billion by 2025, according to a 2020 report by Google, Temasek, and Bain & Company.

But Huawei’s dominance has raised alarm among experts who spoke to BenarNews, amid warnings from the U.S. and other Western countries that the Chinese firm engages in espionage and sabotage activities, which it denies.

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Students walk on the campus of the Del Institute of Technology in Toba, a regency in North Sumatra, Indonesia, July 27, 2023. [Ahmad Syamsudin/BenarNews]

Ardi Sutedja, chairman of the Indonesia Cybersecurity Forum and a former government consultant, said Huawei is deeply embedded in the national telecommunications infrastructure, from the core network to the end-user devices.

“It’s going to be so difficult for us to transition to another company because from upstream to downstream, our 3G and 4G infrastructure is already being managed by Huawei,” he told RFA.

‘Technology can colonize them’

Huawei has been providing its products and services to Indonesia since 2000, according to its website.

It has established partnerships with more than 100 local companies and more than 30 universities, and created more than 20,000 jobs directly and indirectly, according to the company’s website. It also has an agreement on cybersecurity cooperation with Indonesia’s National Cyber and Crypto Agency, or BSSN.

Ardi warned of the potential dangers of Indonesia relying on one foreign company, especially for cybersecurity. He noted that people “enjoy the wave of new technology without realizing that technology can also colonize them.”

Alfons Tanujaya, another cybersecurity expert, said Indonesia needs to be careful about allowing outsiders’ controlling its networks -- “not only China but also the United States.” 

“When we talk about spying, without 5G we can already be spied on,” he said. “All our hardware is from China, we use modems, CCTV cameras, and everything from China.”

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Customers shop at a retail store displaying Chinese-made mobile accessories, in a mall in Bandung, Indonesia, July 15, 2023. Credit: Gemunu Amarasinghe/RFA Photo

The United States has voiced increasing concern over Huawei. It has banned Huawei from its 5G networks and put pressure on its allies to do the same. 

In 2020, Robert O’Brien, then the U.S. national security adviser, said the United States had evidence that Huawei could “access sensitive and personal information” in the systems it maintains around the world. He contended that Huawei is influenced by the Chinese government and must comply with directives of the Chinese Communist Party.

Huawei has repeatedly denied these allegations, saying it is an independent company and that no government has ever asked it to compromise its products or customers’ data.

BenarNews repeatedly requested an interview with Huawei for this story, but the requests were declined.

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Chinese President Xi Jinping attends a Roundtable Summit Phase One session of the Belt and Road Forum, at the International Conference Center in Yanqi Lake in Beijing, May 15, 2017. Credit: Lintao Zhang/Pool/Reuters file photo

Provider of choice

Huawei devices and networks are ubiquitous in Southeast Asia.

Last year, researchers at the Carnegie Endowment for International Peace, a non-partisan think tank in Washington, said that Huawei “has positioned itself as Indonesia’s cybersecurity provider of choice” through its vast cybersecurity and other training programs for groups ranging from senior government officials to rural students.

Luhut, the minister who leads Jakarta’s cooperation with Beijing, summed up the approach in 2021 – under which China provides hardware and training, and Indonesians install, maintain and use the networks.

“Why do I get along with China? China is very generous in sharing its technology with us,” he said then. “They have always been willing to give us whatever we ask for. This helps us to keep up with technological advancements.”

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Luhut Pandjaitan, Indonesia’s coordinating minister for maritime affairs and investment (left), meets with then-Chinese Premier Li Keqiang at the Great Hall of the People in Beijing, April 12, 2018. Credit: Naohiko Hatta/Pool via Reuters file photo

Some Western tech companies, such as Ericsson, Nokia and Google, also cooperate with the Indonesian government and its educational institutions, but not as extensively as with Huawei, according to experts.

They said Huawei had dominated Indonesia’s telecommunications infrastructure by offering low prices, credit from Chinese banks, and training for locals.

Huawei equipment is mainly used in the Palapa Ring project, a 35,000-kilometer (22,000-mile) national fiber-optic network that covers more than 500 regions and cities in the Indonesian archipelago, the first phase of which was carried out by Huawei Marine.

“We welcome Huawei’s support for developing digital talents in Indonesia and around the world,” said Wayan Toni Supriyanto, the director general of international cooperation at the Ministry of Communications and Information Technology.

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Smart watches made by Chinese tech giant Huawei are displayed at a retail shop in Bandung, Indonesia, July 15, 2023. Credit: Gemunu Amarasinghe/RFA Photo

Hurdles for Huawei

With an average rate of 4 U.S. cents per gigabyte, Indonesia has some of the lowest cellular data costs in the Asia-Pacific, according to the Indonesian Telematics Society, a forum for stakeholders in the Indonesian digital industry.

The Indonesian Internet Service Providers Association says internet penetration in Indonesia has reached 78%, or 215.6 million users -- although there is still a significant gap between urban and rural areas. The government said around 7,000 small and remote villages are still underserved by internet providers.

Against this backdrop, Huawei still faces headwinds in building its business.

It confronts legal challenges in several countries over its alleged theft of trade secrets, violations of U.S. sanctions against Iran, fraud, racketeering and patent infringement. Huawei has denied or contested these charges as well.

It faces restrictions or bans on its equipment or services in the United States, Australia, New Zealand, Japan, and the United Kingdom. 

These moves have hampered Huawei’s global expansion and market share, especially in the 5G sector.

Huawei has also faced supply-chain disruptions due to the U.S. sanctions that prevent it from accessing key components and technologies from American suppliers. This has affected its ability to produce and sell its products, such as smartphones and network equipment.

Huawei has sought to develop its own alternatives, such as its HarmonyOS operating system and its HiSilicon chips. It has also been seeking new markets and partners in other regions, such as in Africa, Latin America, and the Middle East.

Huawei has also been lobbying and suing to defend its rights and reputation, as well as engaging in P.R. campaigns to win over public opinion and trust.

Career boost

Among tech-savvy Indonesians, the cachet of Huawei appears high.

Muhammad Ihsan Fawzi, a lecturer at South Tangerang Institute of Technology near Jakarta, said he had received several job offers and speaking invitations after obtaining a Huawei certification for mobile development. He learned how to create applications for Huawei devices and platforms, and to include features such as location, analytics, push notifications, in-app purchases, and cloud functions.

“After I received the certification and published it on my LinkedIn, several companies contacted me and offered me a job position as a mobile developer or a project manager,” he said.

He didn’t take up those offers as he did not want to leave his present job. 

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The Indonesian name for the Del Institute of Technology is seen on a sign at the campus in Toba, a regency in North Sumatra, Indonesia, July 27, 2023. Credit: Ahmad Syamsudin/BenarNews

Istas Manalu, a lecturer from IT Del who participated in a summer camp organized by Huawei in China in June, said the camp offered leadership sessions and further training in cloud computing, artificial intelligence, and IT governance.

He said it was an opportunity for both lecturers and students “to familiarize ourselves with the development of 5G technology, cyber security, cloud computing, and AI, as they have a strong base in those areas.” 

Onno W. Purbo, a computer engineering lecturer and a proponent of open-source tech, warned however that digital colonization by China was now a reality in Indonesia. 

“We are really dependent on them because we don’t have the capacity,” said Purbo, a deputy rector at the South Tangerang Institute of Technology.

But he likened it to Indonesia being “colonized” by Japan through the domination of Japanese car and motorcycle brands.

Simanjuntak of IT Del, however, dismissed concerns about Huawei.

He said that his institution’s partnership with the company was purely technical and practical. He noted that his institution also collaborates with Western companies, including Cisco and Google.

“We are not discriminating against specific companies, but it’s free competition, let it be free. When we partner with someone, there should be mutual benefits,” he said.

BenarNews and Radio Free Asia collaborated on this special report.

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