Convergence in Indonesia; Hype or reality

1. Convergence in Indonesia;Hype or reality ? Suryatin Setiawan RisTI TELKOM Jakarta May 2000

2. 4/27/2012 ss/nbtoshib/D/convergencemastel 2 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

3. 4/27/2012 ss/nbtoshib/D/convergencemastel 3 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

4. 4/27/2012 ss/nbtoshib/D/convergencemastel 4 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

5. 4/27/2012 ss/nbtoshib/D/convergencemastel 5 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

6. 4/27/2012 ss/nbtoshib/D/convergencemastel 6 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

7. 4/27/2012 ss/nbtoshib/D/convergencemastel 7 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

8. 4/27/2012 ss/nbtoshib/D/convergencemastel 8 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

9. 4/27/2012 ss/nbtoshib/D/convergencemastel 9 Steps that can be done When socio economy environment are back on track then : 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

10. 4/27/2012 ss/nbtoshib/D/convergencemastel 10 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