Late last year, the GSMA published Advancing Connected Industries in ASEAN, bringing together eight case studies spanning manufacturing, logistics, ports, mining, smart cities and transport infrastructure. One of the most interesting examples from a private networks perspective is the 5G Smart Manufacturing Lighthouse jointly developed by Telkomsel and Pegatron in Batam, Indonesia.
The deployment is located at Pegatron’s 85,000 square metre manufacturing facility in Batamindo Industrial Park. Rather than using 5G simply as another connectivity option, the two companies have built a dedicated 5G Standalone private network as the digital foundation for factory automation, real-time analytics and intelligent maintenance.
Telkomsel acts as the prime partner, system integrator and managed service provider. It supplies the licensed spectrum, carrier-grade private 5G Core and on-premises Multi-access Edge Computing, or MEC, platform. Pegatron provides the purpose-built 5G radio access network, industrial devices and the manufacturing applications that run over the network. These include industrial 5G terminals, dongles, gateways, CPEs, cameras and communications modules for Automated Guided Vehicles, or AGVs.
This division of responsibilities is worth noting. Telkomsel brings mobile network expertise, spectrum and operational support, while Pegatron contributes detailed knowledge of manufacturing processes, industrial devices and factory automation. It is not simply an operator installing a network for an enterprise. It is a jointly designed industrial platform in which connectivity, equipment and applications have been developed together.
The private network uses a 5G SA architecture with local processing and an air-gapped, SIM-based security model. End-to-end encryption and a zero-trust approach are used to isolate the factory environment, while traffic can remain within the premises rather than being routed through a distant public cloud.
The network is reported to support latency below 10 milliseconds, network slicing, differentiated Quality of Service and large numbers of connected devices. Dedicated network resources can therefore be assigned to different applications according to their requirements.
An AGV control system, for example, needs dependable mobility, rapid response and seamless handover while vehicles move around the factory. AI-based video inspection requires high and consistent uplink capacity. Predictive maintenance may involve large numbers of sensors transmitting smaller amounts of data, but it still requires reliability and timely delivery. The private 5G platform allows these applications to operate simultaneously without one workload compromising another.
The first major use case is AGV fleet automation. AGVs are used to move components and materials between different parts of the production process. Unlike fixed machinery, these vehicles must remain connected as they travel across production areas, storage locations and loading zones.
Wi-Fi can support AGVs in some environments, but coverage gaps, interference and handover delays can interrupt operations in a large and constantly changing factory. The private 5G network provides more predictable coverage and mobility, with the report indicating that the AGV fleet achieved 99.9% uptime and that seamless handover eliminated network-related stoppages.
The second use case is AI-enabled quality inspection. Cameras capture images or video from the production line and send them to locally hosted AI applications that check whether manufacturing processes and Standard Operating Procedures are being followed correctly.
This is a demanding uplink use case because several cameras may need to send high-resolution video at the same time. Processing the data at the local edge reduces the time between capturing an image, analysing it and taking corrective action. According to the case study, AI-driven SOP monitoring reduced in-process human errors by 30%, helping to reduce scrap and rework.
The third main application is predictive maintenance. Sensors and monitoring systems collect information from machines so that changes in vibration, temperature, performance or other operating conditions can be detected before equipment fails. The factory can then schedule maintenance based on the actual condition of the machinery rather than relying entirely on fixed maintenance intervals or reacting after a failure.
The report states that unplanned downtime was reduced by 10%. This is significant in a manufacturing environment where the failure of one machine can affect an entire production line.
One of the practical challenges was connecting existing industrial equipment. Many older machines did not support 5G devices or the necessary software drivers. Replacing them would have been expensive and would have undermined the business case.
Pegatron and Telkomsel instead developed industrial gateways that translate traditional interfaces, including RS-485 and Ethernet, into 5G connectivity. This allows the factory to retain existing machinery while gradually adding new connectivity, monitoring and automation capabilities.
The network also has to adapt as production lines and processes change. Manufacturing facilities are not static environments. Equipment is moved, production layouts are redesigned and new products introduce different communications requirements. The deployment therefore includes AI and machine learning-assisted network monitoring to help identify performance changes, adjust parameters and reallocate resources.
The project also required changes beyond the network itself. Factory employees needed training to work alongside automated systems, while IT teams had to develop skills in radio planning, 5G Core management and mobile network troubleshooting. Some workers moved into roles such as process supervision, data analysis and robotics coordination. The case study highlights workforce retraining as one of the important lessons from the project, rather than treating industrial automation as a purely technical exercise.
The results reported by Telkomsel and Pegatron go beyond improvements in network performance:
- Production-line reconfiguration time was reduced by more than 70%.
- Initial deployment costs for new production lines were reduced by 20%.
- Half of this cost reduction was attributed to eliminating extensive physical cabling.
- Overall Equipment Effectiveness increased by 5% during the first year.
- Unplanned downtime was reduced by 10%.
- In-process human errors fell by 30%.
- AGV fleet uptime reached 99.9%.
The reduction in production-line reconfiguration time is particularly interesting. Wireless connectivity allows machines, cameras, sensors and other production equipment to be moved without installing new data cabling throughout the factory. This provides greater flexibility when production lines need to be adapted for new products or changing demand.
The next phase will expand the private network from approximately 600 to more than 1,200 connected devices, supporting more than 4,000 terminals. Batam is also expected to become a regional Centre of Excellence for industrial 5G, supporting demonstrations, customer onboarding and further deployments.
Telkomsel and Pegatron are already examining several 5G-Advanced capabilities. These include RedCap for connecting larger numbers of lower-complexity industrial devices, enhanced positioning for AGVs and robotics, and AI-native network management for automated optimisation.
Over a longer period, Pegatron plans to replicate the Lighthouse Factory model in India, Vietnam and North America. It also intends to develop a full digital twin of the factory, allowing production systems and operational changes to be simulated before they are introduced into the physical environment.
The Batam deployment demonstrates that the value of private 5G does not come from connectivity alone. The benefits appear when licensed spectrum, a local 5G Core, edge computing, industrial devices and operational applications are designed as one system.
It also shows that successful industrial private networks need a clear partnership model. The operator provides reliable and secure communications infrastructure, while the manufacturer defines the operational problems, devices and applications that the network must support.
Most importantly, the project provides measurable evidence of improvements in agility, equipment effectiveness, uptime and production quality. These are the results that will determine whether private 5G moves beyond individual trials and becomes a repeatable platform for smart manufacturing across Indonesia and the wider ASEAN region.
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