Becoming Telco 2.0 Toward Knowledge Based Economy

1. Becoming Telco 2.0 Toward Knowledge Based Economy Sesindo 2010 Surabaya, 4-Desember-2010 Arief Mustain

2. Content Knowledge based Economy Overview Knowledge Based Economy Players Becoming Telco 2.0

3. To capitalise on the growing knowledge based economy, we need to consider: Connectivity Capabilities • 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 Confidence Content • A secure and trusted environment for digital information • E-security, Cyber-safety • Identity management • IPv6 Readiness • Service reliability • Future proof technology adoption • 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)

4. To capitalise on the growing knowledge based economy, we need to consider: Connectivity Capabilities • 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 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.

5. Country ICT Indicators

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

7. The growing of knowledge based economy considering beyond population opportunity as well M2M (Beyond Population) • 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 • Solution based • Industrial related • Verizon • Deutsch Telekom TV Set (#Household Proxy) • GoogleTV • Apple TV • Bharti (200k) • PLTD (25k) • Internet Service • Social Networking • Multimedia Ent. WiFi Enable Gadget • Softbank • AT&T • BT • Personal Productivity & Entertainment PC/NB • Internet Service • Home & Office • ISP • CSP

8. Convergence The Challenge of the Value Chain

9. 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) ?

10. 100,000 The digital economy will also be vital, but Australia currently lags in broadband penetration and speed Our broadband penetration leads the OECD average but trails the leaders... ...our speed is below average compared to international peers Source: OECD, Broadband Statistics to June 2007; OECD, Broadband Statistics to Oct 2007

11. To meet these challenges, the economy will need to be flexible, productive, and highly participative Sustainable growth A working economy A productive economy A flexible economy Covered in Education, Skills And The Productivity Agenda Covered in this stream Human capital investment Competition Mobility Infrastructure High Participation rates Market efficiency Regulation Digital Capacity

12. Knowledge Based Economy Services

13. KBE Strategy – South Korea Case Source:KISDI

14. Tourism, Hospitality & Retail Healthcare & Biomedical Sciences Ultra-high speed, pervasive, intelligent and trusted infocomm infrastructure Globally competitive infocomm industry Infocomm-savvy workforce and globally competitive infocomm manpower Education & Learning Financial Services Digital Media & Entertainment Manufacturing & Logistics Government Transform Knowledge Based Economy Sectors, Government and Society using Infocomm Singapore Case – Source:IDA

15. INDUSTRI AGRO INDUSTRI TELEMATIKA INDUSTRI TRANSPORT INDUSTRI NASIONAL TAHUN 2020 INDUSTRI MASA DEPAN PETROKIMIA, SEMEN, BAJA, DLL TPT, SEPATU, ELEKTRONIK, DLL INDUSTRI BARANG MODAL BASIS INDUSTRI MANUFAKTUR INDUSTRI KOMPONEN (BASIS UKM) SDA TERBARUKAN SDA TDK TERBARUKAN SUMBER DAYA MANUSIA Bangun Sektor Industri (Year 2020) ........ Industri Telematika merupakan salah satu pilar dari Tiga Pilar Utama pada bangun industri masa depan ....... 15 Source: Paparan Menteri Perindustrian Pada Rakornas 2009

16. Automotive; Maritime; Aircraft; Rail. II. Transportation Equipments INDUSTRI PRIORITAS CPO; Fish processing; Rubber; Timber; Tobacco; Cacao; Coffee; Fruit; Sugar. I. Agro 32 priority industries chosen out of 365 industries, with • total output 78% • total export 83% Textile; Ceramic Paper & pulp; Cement; Steel; Electrical device; Agriculture machine; Factory, construction & mining machine / equipments. IV. Manufacture Industry Base III. ICT Hardware, Software, Telecommunication Devices Focus PriorityIndustries • Craft and art; • Precious stone & jewelry; • Decoration ceramic; • Atsiri oil; • Snack. V. Small Medium Industries 16 Source: Paparan Menteri Perindustrian Pada Rakornas 2009

17. Indonesia Connected Hubungan ICT dengan pertumbuhan ekonomi Kominfo berkontribusi pada pertumbuhan ekonomi melalui 3 jalur:Kekuatan ekonomi, Kekuatan Intelektual, Kekuatan sosial First impact second impact ElemenProduksi (Kapital, TenagaKerja,dll) Investasi ICT (A) (a) Kekuatan Ekonomi Produktifitas (Inovasi, Perbaikan Managemen) Inovasi (Litbang) Informatisasi Pendidikan (e-pendidikan) PEMBANGUNAN ICT PERTUMBUHAN EKONOMI Human Capital (Pendidikan, SDM, Pengetahuan, Informasi, dll) (b) (B) Kekuatan Intelektual Komunitas on-line Social Capital (fondasipenting bagimasyarakatwilayah, pemerintahan,dll) (c) (C) Kekuatan Sosial Keterbukaan Informasi

18. Content Knowledge Based Economy Players Knowledge based Economy Overview Becoming Telco 2.0

19. 8 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

20. DotCom valuations are very attractive relative to telcos DotCom Valuation Combined Market Valuation ($B) Revenue multiple Combined Revenues ($B) Global Top 3 Portals/ Internet 7.6 Telcos 0.9 Media / Content 1.5 Source: Yahoo Finance (Jan 2008), SEC Filings, A.T. Kearney analysis

21. 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… Operators Population by Age

23. Indonesia ICT Penetration Amid intensifying competition, Telkom remains market leader in all product lines March 2010 Fixed Wireline Fixed Wireless Mobile/ Cellular (GSM) Internet Broadband 8,7 M 28 M 180 M 35 M 3,9 M • Fixed BB • Speedy 1,16 M (76%)‏ • Mobile BB 2,2 M (Telkomsel 66%)‏ • Others • Internet Kiosk • Campuses • Schools • Offices • Households • Telkomsel 46% • Indosat • XL-Axiata • Hutch-3 • AXIS • TELKOM 99% • INDOSAT • BBT • TelkomFlexi 57% • Esia • StarOne • Mobile-8 Penetration Penetration Penetration Penetration Penetration 4% 12% 77% 15% 2% Note : Indonesia population around 234 million

24. Indonesia’s broadband penetration is still low compared to other countries in the region – significant upside potential Residential Fixed Broadband Penetration Percentage of households Residential Fixed Broadband Penetration Percentage of households Developed Nations* China Malaysia Brazil Colombia Vietnam Ukraine China Vietnam Regional Average Philippines Thailand Thailand Morocco Philippines Pakistan Nigeria Egypt Indonesia Indonesia India India 2.0 2.5 3.0 3.5 4.0 4.5 6.5 7.0 7.5 8.0 8.5 9.0 9.5 GNI per capita PPP USD thousands * Average of USA, Canada, Germany, France, UK, Singapore Source: Pyramid, ITU, Ovum 24

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

26. 1. yahoo.co.j) 2.google.co.jp 3. fc2.com 4. youtube.com 5. ameblo.jp (loacal content) Peluang dari bisnis ContentTop Five DotCom (from alexa.com) China 1. baidu.com (local content) Japan Korea Indonesia 2. qq.com (local content) 1. naver.com (local content) 1. facebook.com) 3.taobao.com (local content) 2. google.com 2. google.co.id. 3. google.com 3. yahoo.com 4. gogle.com.hk 4. yahoo.com 5. sina.com.cn (local content) 4. daum.net (local content) 5. blogger.com 5. facebook.com 6. kaskus.us

27. Content Becoming Telco 2.0 Knowledge based Economy Overview Knowledge Based Economy Players

28. Service Providers are headed for change Source : Cisco

29. Focus Symphony Strategy of broadening “T(elecoms)” : Broad top, sleek bottom Be Different Service Control SDP & IMS Source : Fokus Fraunhofer

30. Two 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”

31. Customers are taking control : “me”-era

32. New Telco Architecture

33. 8 Rethinking on Business Model

34. Power Play Telco (Device-Network-Apps)Content & Apps. as benefit leader to core services 3rd Party Partnership ubiquitous Core Service Distribution Cloud Services & Apps Portal Users UI OSS-BSS-SDP (Enabler) OS & Devices Content (Game, Music, Education, Sport) Source : Amdocs (adopted), Telco 2.0 Conference, 2009

35. Strengthening Innovation via collaboration with crowdsourcing Collaborative Innovation Environment Source: Kuiper, TNO 2009

36. Strengthening Innovation via collaboration with Social Media

37. Terima Kasih