Becoming Telco 2.0 Toward Knowledge Based Economy

Arief Mustain

Sesindo 2010Surabaya, 4-Desember-2010

Sesindo 2010Surabaya, 4-Desember-2010

2

Content

Knowledge based Economy Overview

Knowledge Based Economy Players

Becoming Telco 2.0

Infrastructure and technology• Computers in schools/home• Digital TV transition• Convergent services and devices• Spectrum planning and licensing• Broadband Access Availability

Ensuring all potential users have the skills to access the digital economy

• Digital/ICT literacy• Community readiness/connectivity• ICT skills training (students and

teachers)• Government Leadership

Opportunities for innovative content and application creation for community and commercial use

• Content regulation (online and convergent devices)

• Codes of practice (broadcasting and internet regulation)

A secure and trusted environment for digital information

• E-security, Cyber-safety• Identity management• IPv6 Readiness• Service reliability• Future proof technology adoption

To capitalise on the growing knowledge based economy, we need to consider:

Connectivity Capabilities

ContentConfidence

Infrastructure and technology• Computers in schools/home• Digital TV transition• Convergent services and devices• Spectrum planning and licensing• Broadband Access Availability

Ensuring all potential users have the skills to access the digital economy

• Digital/ICT literacy• Community readiness/connectivity• ICT skills training (students and

teachers)• Government Leadership

To capitalise on the growing knowledge based economy, we need to consider:

Connectivity Capabilities

Even companies that have made significant investments in information technology are not getting the results they could be. What's interesting is that the gap is not the result of a lack of technology spending. In fact, most companies have invested in the basic building blocks: PCs for productivity applications; networks and electronic mail (e-mail) for communications; basic business applications. The typical company has made 80 percent of the investment in the technology that can give it a healthy flow of information yet is typically getting only 20 percent of the benefits that are now possible. The gap between what companies are spending and what they're getting stems from the combination of not understanding what is possible and not seeing the potential when you use technology to move the right information quickly to everyone in the company.

Country ICT Indicators

The growing of knowledge based economy will be determined by the closest element around users; devices

PC/NB

WiFi EnableGadget

TV Set(#Household Proxy)

M2M(Beyond Population)

• Softbank• AT&T• BT

• GoogleTV• Apple TV• Bharti (200k)• PLTD (25k)

• Verizon• Deutsch Telekom

• Solution based• Industrial related

• Internet Service• Social Networking• Multimedia Ent.

• Personal Productivity & Entertainment

• ISP• CSP

• Internet Service• Home & Office

Key Challenges:• Affordability Declining prices of broadband services will boost adoption

• Availability Increased network coverage using multiple technologies platforms will boost broadband adoption• Rich Content & Application Increased popularity of ‘bandwidth intensive’ content (e.g. YouTube, Skype talk, IM, social networking) both globally and in Indonesia will lead increased broadband uptake

The growing of knowledge based economy considering beyond population opportunity as well

The Challenge of the Value ChainConvergence

The convergence device, the closest element around us

Is it a computer (due to its OS and applications) ?Is it a communication device (phone function, Internet access) ?Is it a multimedia device (video cam, video streaming, etc) ?

The digital economy will also be vital, but Australia currently lags in broadband penetration and speed

Source: OECD, Broadband Statistics to June 2007; OECD, Broadband Statistics to Oct 2007

Our broadband penetration leads the OECD average but trails the leaders...

...our speed is below average compared to international peers

0 10 20 30 40

Average broadband penetration –selected OECD countries (%)

Denmark

Netherlands

Korea

Canada

United Kingdom

Australia

United States

Japan

Germany

OECD

Spain

Italy

Hungary

Slovak Republic

Turkey

Mexico

0 25,000 50,000 75,000 100,000

Average advertised broadband download speed –selected OECD countries (Mbit/s)

Japan

France

Korea

Sweden

OECD

New Zealand

Italy

Portugal

Australia

United Kingdom

Germany

United States

Canada

Netherlands

Ireland

Turkey

To meet these challenges, the economy will need to be flexible, productive, and highly participative

Sustainable growth

A working economy

A flexible economy

A productive economy

Covered in Education, Skills And The Productivity Agenda

Human capital investment

High Participation

rates

Covered in this stream

Infrastructure

Marketefficiency

Competition

Regulation

Mobility

DigitalCapacity

Knowledge Based Economy Services

KBE Strategy – South Korea Case

Source:KISDI

14

Transform Knowledge Based Economy Sectors, Government and Society using Infocomm

Digital Media & Entertainment

Education & Learning

Government

Healthcare & Biomedical Sciences

Manufacturing & Logistics

Tourism, Hospitality & Retail

Financial Services

Ultra-high speed, pervasive, intelligent and trusted infocomm infrastructure

Globally competitive infocomm industry

Infocomm-savvy workforce and globally competitive infocomm manpower

Singapore Case – Source:IDA

Bangun Sektor Industri (Year 2020)

........ Industri Telematika merupakan salah satu pilar dari Tiga Pilar Utama pada bangun industri masa depan .......

SDA TERBARUKANSUMBER DAYA MANUSIA

SDA TDK TERBARUKAN

PETROKIMIA, SEMEN, BAJA,

DLL

TPT, SEPATU, ELEKTRONIK, DLL

INDUSTRI BARANG MODAL

INDUSTRI KOMPONEN (BASIS UKM)

INDUSTRI AGRO

INDUSTRI TELEMATIKA

INDUSTRI TRANSPORT

INDUSTRI NASIONAL TAHUN 2020

INDUSTRI MASA DEPAN

BASIS INDUSTRI MANUFAKTUR

1515Source: Paparan Menteri Perindustrian Pada Rakornas 2009

32 priority industries chosen out of 365 industries, withtotal output 78% total export 83%

Focus

Priority Industries

CPO; CPO;

Fish processing;Fish processing;

Rubber;Rubber;

Timber;Timber;

Tobacco;Tobacco;

Cacao;Cacao;

Coffee;Coffee;

Fruit;Fruit;

Sugar.Sugar.

CPO; CPO;

Fish processing;Fish processing;

Rubber;Rubber;

Timber;Timber;

Tobacco;Tobacco;

Cacao;Cacao;

Coffee;Coffee;

Fruit;Fruit;

Sugar.Sugar.

I. AgroI. Agro

Automotive;Automotive;

Maritime;Maritime;

Aircraft;Aircraft;

Rail.Rail.

Automotive;Automotive;

Maritime;Maritime;

Aircraft;Aircraft;

Rail.Rail.

II. Transportation

EquipmentsTextile;

Ceramic

Paper & pulp;

Cement;

Steel;

Electrical device;

Agriculture machine;

Factory, construction & mining

machine / equipments.

Textile;

Ceramic

Paper & pulp;

Cement;

Steel;

Electrical device;

Agriculture machine;

Factory, construction & mining

machine / equipments.

•Craft and art;•Precious stone & jewelry;•Decoration ceramic;•Atsiri oil;•Snack.

•Craft and art;•Precious stone & jewelry;•Decoration ceramic;•Atsiri oil;•Snack.

V. Small V. Small Medium Medium

IndustriesIndustries

IV.

Manufacture Industry

BaseIII. ICTHardware, Software, Telecommunication

Devices

INDUSTRI PRIORITAS

1616Source: Paparan Menteri Perindustrian Pada Rakornas 2009

Indonesia Connected17

Hubungan ICT dengan pertumbuhan ekonomiKominfo berkontribusi pada pertumbuhan ekonomi melalui 3 jalur:Kekuatan ekonomi, Kekuatan Intelektual, Kekuatan sosial

(a)

(b)

(c)

Human Capital(Pendidikan, SDM, Pengetahuan,

Informasi, dll)

Social Capital (fondasi penting bagi masyarakat wilayah,

pemerintahan,dll)

(A)

(B)

(C)

Kekuatan Ekonom

i

First impact second impact

PEM

BAN

GU

NAN

ICT

PERT

UM

BUH

AN E

KON

OM

I

Elemen Produksi (Kapital, Tenaga Kerja,dll)

Produktifitas(Inovasi, Perbaikan Managemen)

Inovasi

(Litbang)

Investasi ICT

Informatisasi

Pendidikan

(e-pendidikan)

Komunitas

on-line

Keterbukaan

Informasi

Kekuatan Intelektual

Kekuatan Sosial

18

Content

Knowledge Based Economy Players

Knowledge based Economy Overview

Becoming Telco 2.0

Rethinking Market in The Knowledge Based Economy Point of View

Core Services, Partner Services and Marketplace Services required specific competencies and should be reflected on organizational structure as well. It started from product development toward marketing strategy as well as channel preference for each service categories. The long tail economy models are in place

DotCom valuations are very attractive relative to telcos

$250.1

$173.3

$264.3

Combined Revenues ($B)Combined Revenues ($B) Combined Market Valuation ($B)Combined Market Valuation ($B)

Portals/ InternetPortals/ Internet

TelcosTelcos

Media / ContentMedia / Content

Global Top 3Global Top 3

Source: Yahoo Finance (Jan 2008), SEC Filings, A.T. Kearney analysis

$35.0

$112.0

$282.5

7.6

0.9

1.5

Revenue multipleRevenue multiple

DotCom ValuationDotCom Valuation

Will Googles world give the impact Telco Operators?

Source: http://www.telco2.net/blog/2008/03/google_vs_telcos_the_tale_of_t.html

22

Indonesia’s Telco Industry Landscape

There are 11 operators serving more than 234 Mn population, in which 56% of them are young dynamic population…

9%

27%8%

56%

0-14

15-19

20-59

60+

Population by AgePopulation by Age

Indonesia population Population: approx. 234 million + Young dynamic population 56%

OperatorsOperators

23

Indonesia ICT Penetration

Mobile/Cellular (GSM)

Fixed Wireline

Fixed Wireless

Internet Broadband

TELKOM 99% INDOSAT BBT

Telkomsel 46% Indosat XL-Axiata Hutch-3 AXIS

TelkomFlexi 57% Esia StarOne Mobile-8

8,7 M8,7 M 28 M28 M 180 M180 M 35 M35 M 3,9 M3,9 M

Internet Kiosk Campuses Schools Offices Households

Fixed BB Speedy 1,16 M (76%) Mobile BB 2,2 M (Telkomsel 66%) Others

4%Penetration

12%Penetration

77%Penetration

15%Penetration

2%Penetration

Note :Note :Indonesia population around 234 millionIndonesia population around 234 million

Amid intensifying competition, Telkom remains market leader in all product lines

March 2010

24 24

Indonesia’s broadband penetration is still low compared to other countries in the region – significant upside potential

0

10

20

30

40

50

60

70

80

90

2000 2005 2010 2015

Residential Fixed Broadband PenetrationPercentage of households

Developed Nations*

Regional Average

India

China

Thailand

Vietnam

Malaysia

PhilippinesIndonesia

* Average of USA, Canada, Germany, France, UK, Singapore

Source:Pyramid, ITU, Ovum

02468

1012

14161820222426

GNI per capita PPPUSD thousands

9.59.08.58.07.57.06.54.54.03.53.02.52.0

Morocco

Residential Fixed Broadband PenetrationPercentage of households

Ukraine

EgyptNigeria Pakistan

Brazil

Colombia

China

Thailand

VietnamPhilippines

IndonesiaIndia

Indonesia’s ICT Market Size - 2009 (Trillion IDR)

Peluang dari bisnis ContentTop Five DotCom (from alexa.com)

1. baidu.com (local content)1. baidu.com (local content)

2. qq.com (local content)2. qq.com (local content)

3.taobao.com (local content)3.taobao.com (local content)

4. gogle.com.hk4. gogle.com.hk

5. sina.com.cn (local content)5. sina.com.cn (local content)

ChinaChina

Japan Japan

Korea Korea1. yahoo.co.j)1. yahoo.co.j)

2.google.co.jp2.google.co.jp

3. fc2.com3. fc2.com

4. youtube.com4. youtube.com

5. ameblo.jp (loacal content)5. ameblo.jp (loacal content)

1. naver.com (local content)1. naver.com (local content)

2. google.com2. google.com

3. yahoo.com3. yahoo.com

4. daum.net (local content)4. daum.net (local content)

5. facebook.com5. facebook.com

1. facebook.com)1. facebook.com)

2. google.co.id.2. google.co.id.

3. google.com3. google.com

4. yahoo.com4. yahoo.com

5. blogger.com5. blogger.com

Indonesia Indonesia

6. kaskus.us6. kaskus.us

27

Content

Becoming Telco 2.0

Knowledge based Economy Overview

Knowledge Based Economy Players

Service Providers are headed for change

Source : CiscoSource : Cisco

Strategy of broadening “T(elecoms)” : Broad top, sleek bottom

Source : Fokus Fraunhofer

Service Control SDP & IMSService Control SDP & IMS

Focus

Symphony

Be DifferentBe Different

Two Sided Market ArchitectureTwo Sided Market Architecture

Key Success Factors: • Menyediakan “Creative PlayGround” yang memungkinkan application developers (upstream customers) mengembangkan berbagai application/services dengan mengoptimalkan Telco Assests & Capabilities• Optimalisasi Web2.0 untuk memaintain komunitas “Pro-sumers”

Customers are taking control : “me”-era

New Telco Architecture

Rethinking on Business Model

DistributionCloud

Users UI

Services & Apps

OSS-BSS-SDP (Enabler)

Content (Game, Music, Education, Sport)

OS & Devices

Portal

Power Play Telco (Device-Network-Apps)Content & Apps. as benefit leader to core services

Source : Amdocs (adopted), Telco 2.0 Conference, 2009

ubiquitous Core Service

3rd Party Partnership

Collaborative Innovation Environment

Source: Kuiper, TNO 2009

Strengthening Innovation via collaboration with crowdsourcing

Strengthening Innovation via collaboration with Social Media

Terima Kasih