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CONFIDENTIAL PT Excelcomindo Pratama -2007 1
PT Excelcomindo Pratama Tbk.
Telecommunication IndustryDecember 2007
This document contains confidential and proprietary information belonging toPT Excelcomindo Pratama Tbk., which information may be used
only in connection with the business of PT Excelcomindo Pratama Tbk.
CONFIDENTIAL PT Excelcomindo Pratama -2007 2
• Access Network: 2G and 3G• Core Network: Mobile Soft-Switch• Transmission:
– TDM (PDH – for Transmission Access)– (SDH, DWDM – for Backbone)– (VSAT – for access in isolated area, or backup)– IP (MPLS – for IP Backbone)
CONFIDENTIAL PT Excelcomindo Pratama -2007 3
Agenda
Industry Trend and Technology Evolution2
Telecommunication Industry Overview1
Outline
• Telecommunication network; Mobile or Fixed?
• The Mobile Source Growth; Voice or Data?
• Asia Pacific Mobile Telecoms Market
• Indonesian Market
3 Summary and Feedback
CONFIDENTIAL PT Excelcomindo Pratama -2007 4
Mobile of Fixed?More mobile consumers than fixed network subscribers
Worldwide
Source: IDATE, 2007
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2001 2002 2003 2004 2005 2006
Mill
ions Fixed Lines (Developed Countries)
Fixed Lines (Developing Countries)
Mobile Customer (Developed Countries)
Mobile Customer (Developing Countries)
-
20
40
60
80
100
120
140
2004 2005 2006F 2007F 2008F 2009F 2010F 2011F
Mill
ions Fixed Line Subs
Mobile Subs
Source: BMI, Q1 2007
Indonesia
■ Worldwide■ Mobile subs growth surpassed
fixed subs growth.■ Mobile traffic is increasing while
fixed traffic is decreasing in all major markets
■ Indonesia■ Mobile subs surpassed fixed line in
2002 and continuously growing■ Growth of fixed line coming from
CDMA-based fixed wireless technologies.
■ Wireless will be preferred media of communications.
CONFIDENTIAL PT Excelcomindo Pratama -2007 5
Voice or Data?Mobile Voice and Data ARPU trend
Source: Chetan Sharma Consulting, Aug 2007
■ Mobile Voice ARPU slowly declined
■ In opposite, Mobile Data ARPU gradually increased
■ Indonesia will follow in the next few years
Sample Case in US
CONFIDENTIAL PT Excelcomindo Pratama -2007 6
APAC growth driven by India and IndonesiaAsia Pacific Telecoms - Penetration
Source: Frost & Sullivan, 2007
CONFIDENTIAL PT Excelcomindo Pratama -2007 7
APAC subscriber growth in 2007 still driven by 2G/2.5GAsia Pacific Telecoms – Mobile Subscribers
Source: Frost & Sullivan, 2007
CONFIDENTIAL PT Excelcomindo Pratama -2007 8
Mobile and Internet Industry are main drivers of Indonesia telecommunication industry
Indonesia Telecommunication Industry Trends
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2004 2005 2006e 2007f 2008f 2009f 2010f 2011f
No. of Main Telephone Lines inServices (000)No. of Mobile Phone Subs(000)
No. of 3G Phone Subscribers(000)No. of Internet Users (000)
No. of Broadband Internet Subs(000)
Source: BMI, 2007
CONFIDENTIAL PT Excelcomindo Pratama -2007 9
Market Net Revenue (RpTn)
Market Net Revenue (RpTn)
Wireless Voice and SMS remain the biggest contribution Indonesian Market Outlook
1. Including FWASource: IDC; Analyst reports; Team analysis
2010
90.0
23.2
9.6 2.8 1.6
2006
44.8
16.5
1.6 1.8 0.4
Wireless (Voice & SMS) PSTN Broadband Corporate services Other (VAS, VoIP, Ads)
Voice and SMS: 71% of total telecom revenue (87% excl PSTN) in 2010Voice and SMS: 71% of total telecom revenue (87% excl PSTN) in 2010
CONFIDENTIAL PT Excelcomindo Pratama -2007 10
Wireless revenue will have slower growth, but the intense of competition will higher
Indonesia Telecommunication Industry Trends - Wireless
Actual and forecasted wireless revenue growth
58
1825
3445
9081
70
0
20
40
60
80
100
2003 2004 2005 2006 2007F 2008F 2009F 2010F0%
10%
20%
30%
40%
50%Revenue(Rp Tn)
YOYRevenueGrowth(%)
Rp Tn
CAGR: 34% CAGR: 16%
SIM’s penetration 9% 14% 22% 27% 38% 46% 52% 58%
Actual
Forecast
3-5 Players >11 PlayersNo. of Players
1. Major players onlySource: Analyst report; Team analysis
CONFIDENTIAL PT Excelcomindo Pratama -2007 11
Agenda
Industry Trend and Technology Evolution2
Telecommunication Industry Landscape 1
Outline
• Industry Trend
• Telecommunication Vision
• Technology Roadmap
3 Summary and Feedback
CONFIDENTIAL PT Excelcomindo Pratama -2007 12
Future Trend: Driven by Market’s Needs of Communication & Information
Convergence is a trend of telecommunication !!
Customer’s needs :• Multi services : Voice, Text , Image, Video • “Seamless experience” in technology crossover• One number ( profile) for multi access service
• Broadband internet / data• Less Price• Mobility
CONFIDENTIAL PT Excelcomindo Pratama -2007 13
Future TrendGrowth of Fixed Mobile Convergence
■ Development of Fixed Mobile Substitution■ Fixed network already
been crowded by mobile network
■ Driven by mobile handset functionality
■ Mobile vs. Fixed■ Fixed operators enter
broadband outdoor with BWA technology.
■ Mobile operator enter wireless indoor with BWA technology.Source: Alcatel-Lucent, 2007
■ The trend will continue given the focus on Fixed Mobile Convergence (FMC)■ Offering mobility, flexibility, and all in one product
CONFIDENTIAL PT Excelcomindo Pratama -2007 14
Network will be all-IP based and converged in the future
■ Network will be all IP-based in the future■ Fixed Network
■Copper (TDM) to xDSL
■ Mobile Network■3G and HSPA
■ Cable Network■ Internet access
in setup box.
■ Converged NGN will be the future network.
Source: FOKUS - Berlin, 2006
CONFIDENTIAL PT Excelcomindo Pratama -2007 15
Potential Impact of global trend to Indonesia in the future
3G Arena:• Incumbent• New entrant• cdma2000
VoIP Operators:
Broadcast Operators:GaharuEtc.
Digital TVVoice, Data
Voice over IP
BWA Arena (fixed/low mobility):
Media ArenaFixed Line Operators:
PSTNInternet
Media over Internet
IP-based servicesHigh Speed Data
VoIP ServiceFMC
Internet
Video Call
High speed Data
Mobile TVPresence
Video on Demand
Source: Internal Analysus
CONFIDENTIAL PT Excelcomindo Pratama -2007 18
The migration to NGN with IMS will enable integration (convergence) of broadband, video, wireless and wireline services.
Depending on business feasibility
*) Year is the projection launch time, and subject to awarded license. Technology is on mature stage or has been deployed on other countries
Cellu
lar N
etwo
rk(h
igh
mob
ility)
BWA
Netw
ork
(fixe
d/lo
w m
obilit
y)
PAST 2007 2008 2009 2010 2011 FUTURE
All
IP N
GN
Net
wor
k
Convergence
PAST 2007 2008 2009 2010 2011 FUTURE
Core
Net
work
GPRS
2012
2012
HSDPA
HSUPA
WiFi
WiMAX for fixed application
WiMAX for mobile Application
TDM switchingIP soft switching
IMS
Add On Application Server
Convergent Billing
4G
Slight, but increasing High DecreasingLEGEND
WCDMA
GSM
UMA
CONFIDENTIAL PT Excelcomindo Pratama -2007 19
ApplicationsApplicationenvironment
SGSN GGSN CSCF
ISUPSIP
TDM
MGCF
EnhancedNetwork Services
PSTN /
PLMNMGW
IPbackbone
IMS
InternetTDM
BTS BSC
BTS
ATM
NodeB RNC
NodeB
IP
RNC RNC
NodeB NodeB
GPRS
EDGE
HSDPA
HSUPA
WLAN
WiMAX
DVB-H
R99
RNC
BSC
From TDM to ATM to ‘All IP’…
SYSTEMS TRANSPORT EVOLUTION
CONFIDENTIAL PT Excelcomindo Pratama -2007 20
Effort Required
High effort at the beginning and then …
CONFIDENTIAL PT Excelcomindo Pratama -2007 21
Example of Product & Services roadmap
Circ
uit B
ased
Se
rvic
esPa
cket
Bas
ed
Serv
ices
PAST 2007 2008 2009 2010 FUTURE
Full
IMS
Ser
vice
s (N
GN
)A
ll IP
Net
wor
k (fu
lly c
onve
rgen
ce)
•Com
mon
Pla
tform
•Com
mon
Dev
ices
Convergence
PAST 2007 2008 2009 2010 FUTURE
TDM VoiceSMSVoice MailVoice SMSCLIR, Call ForwardingConferenceCall WaitingVoIP Internationaletc
GPRSWAPData AccessInternet Access
Video CallVideo Conference
EmailHigh Speed Internet GamesMusicSportInfotainmentAudio StreamingVideo Streaming
3G+HSPA IMS
Fixed BWA Low Mobility BWA
*) Depending on the business feasibility
Video Sharing
Mobile TVm-commerce.Information ServicesLocation Based Servicesm-advertising
N/A
VoIP (PC)Large File TransferVideo on DemandHigh Volume InternetMultimedia MessagingInteractive GamesVoice Call Continuity (VCC)
N/A
Unified MessagingDirectoryPresenceReal-time ChatPush to talkVoIP (Handset)Multimedia conferenceVideo mailbox
GSM+GPRSFull Mobility
Low MobilityVoice Data Video Multimedia
CONFIDENTIAL PT Excelcomindo Pratama -2007 22
Agenda
Industry Trend and Technology Evolution2
Telecommunication Industry Landscape 1
Outline
• Summary
• Feedback
3 Summary and Feedback
CONFIDENTIAL PT Excelcomindo Pratama -2007 23
SUMMARY
Converging multiple disparate networks into an IP platform makes good business sense for mobile operators. It results in lower operational costs and heightened efficiencies
Despite of significant Data traffic growth, Voice and SMS will still be the major contributors to the Telecommunication Industry Growth at least for the next 5 years
Wireless market in Indonesia has become a very competitive market with many players involvement. This trend will force player to endorse low pricing strategy
The technology development is still driven by equipment manufacturer/vendor
The industry trend is going towards fix and mobile convergence to offer more mobility, higher flexibility and all in one product concept
CONFIDENTIAL PT Excelcomindo Pratama -2007 24
Feedback
• Industri Telekomunikasi berkembang sangat pesat, teknologinya berrevolusi sangatcepat, memerlukan banyak sumber daya yang siap pakai. Diharapkan lebih banyaklagi pengkayaan dalam kurikulum di universitas yang membahas teknologi yang dipakai di industri, sebagai tambahan dari ilmu dasarnya.
• Menyiapkan sumber daya atau lulusan yang mampu melihat dari berbagai sisi, selaindari sisi teknikal atau teknologi tapi juga aspek regulasi/undang-undang, industri and bisnisnya.
• Universitas mendekati Industri dan sebaliknya untuk mengurangi kondisi sebagai net buyer, melakukan riset untuk area khusus (selected development), misalnya untukOEM (Other Equipment Manufacturer), tidak perlu untuk main equipment. Juga untukmerangsang pengembangan content atau aplikasi yang akan men-drive perkembangan technology oleh vendor, bukan hanya arah sebaliknya.