Affordable & Effective ICT for Rural Indonesia

1. Affordable & Effective ICT for Rural Indonesia Challenge: Delivering Low cost ICT and better performance for services Syailendra@telkom.co.id Strategic Project Management PT Telekomunikasi Indonesia Tbk. Jakarta, 23 March 2011, Indonesia Country Workshop on Rural ICT Development, ITU/ADB

2. Challenges for ICT in Indonesia • 13,700 islands (no 1 in the world) • 300 ethnic groups (no 1) • 1,900 km x 5,100 km (no 1) • 240 Millions population (no 4) • largely rural and poor areas (no 3) • 62.806 Desa/village Challenge How to provide affordable & Effective ICT with better performance at rural Percentage of Poor people low density of ICT, is a growth opportunity Source World Bank: Making the New Indonesia Work for the Poor, 2006

3. Source Badan pusat statistik, Berita Resmi Statistik No. 45/07/Th. XIII, 1 Juli 2010 Garis Kemiskinan Nasional Rp211.726 per kapita per bulan, Maret 2010 (Rp 7,000/day)

4. Indonesia Competitiveness Index In the global context, Indonesia competitiveness index based on the Wolrd Economic Forum (WEF) 2009-2010 ranked 54, WEF Competitiveness is based on the pillars : • effectiveness of the functions of public and private institutions, • availability of infrastructure, • macroeconomic framework is stable, • health facilities and basic education, • higher education and training, • market efficiency, • benefits of technology utilization, • production process, innovation. Opportunity for improvement Increase the competitiveness index will require technology as an accelerator.

5. Integrated Empowerment Model for Rural Energy: electricity, engine Connectivity: digitally & physically connected Education: knowledge, skill improvement Financial: capital, transfer, save, transaction Health: walk, drive, think 5 mother industry CK Prahalad Affordable & effectiveness Technology , productive people, unlimited resources Increase in Competitiveness index Fishery Agricultures Foods Crafts tourism Manufac …….. Industry to the prosperity digital media services : e-finance, e-store, e-trade, e-paymnt, e-... Local & Global Markets

6. Case Indonesia Indonesia Raya Poor Fisherman A fisherman, dreaming to own a fishing boat. There is no formal bank access for the poor in rural areas. ICT implementation for banks in rural areas requires a high cost ICT ChallengeHow can ICT address the needs of delivering low cost banking to reach all Indonesia's population ? The bank is part of mother industry for rural economic growth

7. ICT facts in Indonesia • Internet • 242,968,342 population • 30,000,000 Internet users as of Sept/09, 12.3% penetration • 27,338,560Facebook users on August 31/10, 91% internet users cellular 200 millions subsc www.internetworldstats.com

8. Affordable & Effective ICT Technology Options Affordable & effectiveness technology Delivering low cost services Business models can run, sustain and grow at BoP market Delivering low cost affordable & effective ICT Services BoP: Bottom of Pyramid (people who have low income per capita per month)

9. ICT for Productivity sarana transaksi keuangan Banking & Payment Ecosystem services money transfer services eMoney services education ecosystem services digital music ecosystem services Electronic voucher agent services everything as a service

10. Delivering low cost affordable & effective ICT Services

11. Case.. LIVE !Low Cost ICT for rural BPR & Koperasi… with better performance for services… others Biller • Shared • Data Center • DRC • Server • Software • Development • Ict operation • Processing • Reporting engine Cloud Managed Financial Services Live Since 28 Apr 2009 400 branch online 1 million people connected to the bank • Business Model • Pay as you go • Fast food model Bank Koperasi Bank Koperasi Branch Branch Branch Branch electronic channel: EDC, Mobile, Internet, ATM everywhere, plug n play rural banking/koperasi

12. How Low Can You Go in Rural…with better performance… Affordable & Effective Technology for Rural More standard = get more share More Share & simple = get lower cost Lower cost = get bigger market • Simple Green Screen • Low bandwidth 9,6 kbps • low spec PC • secure & stable

13. Business Model is the Key Cloud service Model Pay as you go Payment Partnership/ Self service Empowering local enterpreneur Channel Ecosystem Services Services Sharing Operation Operation Sharing Infrastructure Infrastructure

14. Case M-Kios Recharge system for prepaid services (pay as you go) e-Recharge Agent TELKOMSEL Authorized Dealer Delivering electronic recharge services Agent Subscriber

15. Industry Model National Focuses – Effective ICT Industries Creative Based  value based price Cloud Services Everything as a services National Focuses Content/App Service Provider Web social, market place, ecommerce, search, advertising, email, chat, voice, Everything as a Service Pushing the affordable availability of ecosystem services, to encourage the acceleration of ICT users Grow new service industries,The diversity and competition in ICT services, not infrastructure competition. Provision of services without having to build infrastructure Connectivity Service Provider (Virtual Network/ non Infrastructure) Telephony, Internet, vpn Infrastructure Consolidation for national efficiency Growing market wholesalers, Economies of scale infrastructure business cost per service is lower, avoid duplication of infrastructure , incentive for infrastructure provider Infrastructure Sharing Service Provider Fibers, Radio Channel, tower, BTS, ducting, Data Center, server Granting special incentives to manufacturing industries of ICT devices and software .Availability of shared facilities necessary to grow the manufacturing industry. Device Manufacture & Software Product: Server, CPE, Router, Modem, Cable, Radio, Sw Product infrastructure sharing can be effectively leveraged to roll-out services at faster speed and at affordable cost. Capex based  Cost based Price

16. Conclusion • Indonesia has a unique geography and demography, and have an impact on the unique challenges for the deployment of ICT • The deployment of ICT in rural areas, require innovations that produce affordable and appropriate services for Indonesia rural • A cheaper service with better performance of services in rural areas, can be done by building a sustainable business model among the partners • To get an affordable and effective ICT services , we need to develop industrial model of sharing infrastructure, operation sharing, and encouraging the growth of content and applications industry in the cloud • Cloud service is an appropriate ICT model for rural

17. Thank You ……with the benefit of ICT let us prosper together…..