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1Indosat IR - New Template v23 1220.pptx

LTE: Technology & Application

This document is for internal purpose only. It is confidential and is not a public document. If the information is given to the public

before made public by the company, it can affect investment decision and can be categorized as misleading information.

Prashant Gokarn

Chief Strategy & Planning Officer - PT Indosat


2/9

I will present my views on

Which bands most relevant?

What are the drivers to make an LTE network

economically viable?

2

Can a standalone wireless broadband model succeed?

Why is the ecosystem so important? What support do

we need from all stakeholders?


3/9

LTE in Indonesia: Key bands

2300 MHzEcosystem weak

Fragmentedownership

Already allocated

TD efficiency

+ -

Needs regulatory OKRe-farm potential

3Indosat IR - New Template v23 1220.pptx 3Indosat IR - New Template v23 1220.pptx

3LTE: Technology & Application

Other bands: not yet standard/ ecosystem weak

2G capacity impact

LTE ecosystem

700 MHz Digital dividendtimetablePropagation benefitLong term ecosystem


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2300 MHz: What can we learn from history?

WiMAX TD-LTE

Mainly ISPs/ specialistsWeak backing from telco

vendors

CM, Softbank, Airtel vs.Augere/ ISPs in Indonesia

Good support on TD-LTE



Dongle focus

No roaming standards

Handsets

Roaming (may be)

TD-LTE success: depends on move to mainstream

from ISP only biz


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1800 MHz: What support needed?

LTE possible only thru 2G re-farmed

10MHz block more possible to re-farm



but 20MHz channel block best for LTE

LTE1800 devices available but still expensive

Regulatory + device ecosystem support


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700 MHz: Why is the option so long-term?

Digital Dividend plans need strong support

Start seeding digital terrestrial

Incentives to analogue broadcasters to start migration plans

Broadcast regulation: e.g. must share/ must carry



Avoid short-term thinking on spectrum value

Risk of high costs

Risk of fragmentation

Need focus on most attractive LTE band

3G auctions fiasco globally


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What cost and business levers do we look at?

Vendor pricing

RAN share solution

Lower n/w O&M

AS A TELCO

>25% higher

N/w cost: >20% higher

DedicatedO&M

AS AN ISP



Offload value from Day 1

Handset integration

Distribution synergy

Brand synergy

Roaming: 20% gross margin

Dual SIM/standby vs. CSFB

6%-12% gross margin

3% gross margin


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How important is the roll-out footprint?

Big bang roll-

out by a telco

OPTION 4

+

Big bang roll-

out by an ISP

OPTION 3

+

Small location

on-net; restthru 2G/ 3G

roaming

OPTION 2

+

Fixed wireless

focus; smallcoverage

footprint

OPTION 1

+



Lower capex

Devices-

Huge capex

Roaming

-

-

Less capex

Roaming

costs

-

-

Less capex

Low take-up-

-ive ~10% -ive ~15%IRR


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9Indosat IR - New Template v23 1220.pptx

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