Transcript Internet, the future business on legacy business model

Convergence in Indonesia;
Hype or reality ?
Suryatin Setiawan
RisTI TELKOM
Jakarta May 2000
Convergence
• User level :
– User appliances that provides access of multimedia or full range of
services over the same apparatus
• Access level :
– A broadband access network that allow access of multimedia
services
• Industry level :
– A trend in the industry that blends the telecom, internet/ data and
video entertainment into one infocom industry
• Regulatory level :
– An approach by the government to regulate the industry as one
single full service industry
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The reality in Indonesia
• User level :
– User are not familiar to operate services other than telephone
– User appliances does not provide the easy access to converged services
• Access level :
– Majority of wire-line access, if not all, are still at telephony quality
– Wireless access offers a more clearer promise on access to converged
services ( 3G)
• Industry level :
– Although Indonesia has had the opportunity to nicely arrange the industry
directly admitting the convergence, Indonesia has failed to do it and
industry has been growing like a copy of US industry long time ago
• Regulatory level :
– Is the most important but also the most difficult entity to quickly adapt
into convergence. That’s part of the reason why Indonesia has missed the
opportunity to modernize the industry ahead of all developed economies
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The rest are hype in Indonesia
• User level :
– With projected 384K subscriber / 1.450 million users of internet
and some tens of thousand of cable users, convergence is really at
its early stage
– User devices do not support convergence
• Access level :
– 6 millions wireline access and 2.2 Million wireless cellular are
mostly normal telephone quality access
• Industry level :
– Telco and cable / multimedia providers are really separated, using
separated infrastructure and having separated licenses from
different government agencies
• Regulatory level :
– Ditjen Postel has been trying to accommodate ‘telematique’ into
their structure , while Deperindag doing also e-commerce related
matter
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Infrastructure is the foundation
• With telephone POTS wireline : is only 6.6 / 8.4 (2004) out of
210 mill people; cellular 2.2/ 8.1 (2004) mill, Indonesia does
not belong to information intensive economy
• Convergence is not an issue until infrastructure is widely
available and accessible to the people so that the people are
trained and used to communicate with modern digital and
cyber way of communicating
• It’s not foresee-able a capacity to build infrastructure at the
rate of 1 mill access wire line per year while Indonesia to
become competitive infocom society would need at least
23 to 52 million Hh access ( 2004) distributed
appropriately according the demography
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Infrastructure and the USO
• Access lines to be added needs 17.5 billion USD if the
average of Hh extremes is going to be given the access to
information
• Convergence in access level will require 3.7 billion USD
if half of the copper base access lines would be
transformed into real broadband access
• 2.5 and 3G wireless cellular will require more
• The USO must be in place with strong and accurate control
to make sure that those who can not afford a private phone
are still having access
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Impact to user
• For an economy like Indonesia convergence is the main
driver for digital divide to happen; with the current crisis ,
it is expectable that DD will hit Indonesia seriously
• For some Indonesian, convergence and e-life will assure
their global competitiveness
• Major strong companies shall keep up with the progress of
convergence by endorsing IT based business processes in
the company
• Government and industries shall jointly promoting the
usage of internet and e-education in high schools and
lower
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The industry…any chance ?
• The electronic , especially telecom manufacturing industry
has lost its ‘golden time’ , unlikely able to sustain the
pressure of technology development and competitiion of an
open market
• The service industry has been very conservative in
developing the infrastructure since the crisis started
• The opportunity remains only in software industry, but
leadership , credibility to build track record is required and
not easy to gain
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Steps that can be done
• When socio economy environment are back on track then :
–
–
–
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Establish strong and credible regulatory environment
Define tariff policy for POTS
Encourage more investors as players
Promoting Indonesia Infocom industry to foster socio economic
development of Indonesia
• ‘Telematika’ does not need GoI driven coordination effort, what
needed is the creation of legislation and regulation that encourage the
convergence and the Infocom sector development and E-Government
to lead the usage of e-service and technology in the society
• Giving support and incentive to soft and knowledge based industries
and protecting competition from being self destructive
• Train and educate the people to go for e-life
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Convergence is still a hype
• Before convergence can have impact to Indonesia,
major basic steps must be taken seriously :
– Reformation must continue
– Economy must back into its track ( require clear and
consistent policy and political stability)
– Sector shall be correctly redesigned
– Industry is moving
– People is benefiting
• Unfortunately, the infocom society and industry is
a global reality that no economy can escape, so be
patient and stay at home
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