Nurturing Digital Broadband Service and Lifestyle : Nurturing Digital Broadband Service and Lifestyle : Building Successful Business Models for 3G in an Emerging MarketBuilding Successful Business Models for 3G in an Emerging Market

By :

Saiful Hidayat

Head of IT Service Policy PT. Telekomunikasi Indonesia

Ha Ha NoiNoi , May 20, May 20thth 20092009

TELKOM in Brief

TELKOM is an InfoCom service

provider in Indonesia, owned by the government of

Indonesia (51.2%) and public shareholders

(48.8%).

TELKOM listed in the Indonesia Stock Exchange

(ISE), London Stock Exchange (LSE) and New

York Stock Exchange (NYSE) in November 14,

1995.

The largest publicly listed company

in Indonesia (+15 % market

capitalization at ISE).

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Number of employees at the Group approximately

30,000

Main Subsidiaries :

Market Capitalization as of Dec 2007 is USD 20

bn and aimed to achieve USD 30 bn by 2010

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Business Context Shift Service Delivery Platform | Home

Telco Strategic Business Risks:The Down Escalator……

1

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5

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8

9

10

Source: E&Y

1. Decline ARPU1. Decline ARPU2. Failure to generate New 2. Failure to generate New

Business modelBusiness model5. Regulatory risk5. Regulatory risk6. Competition from Internet 6. Competition from Internet

CompaniesCompanies

Telco’s Business Environment Challenge : “Running Up on The Down Escalator”

Strategy to be the Winner : Telco vs Internet

Source : Fokus Fraunhofer

Service Control SDP & IMSService Control SDP & IMS

TELCO 2.0 : Telco as Data, Service & Content Pipes, and Service & Content Platform

ContentProviders

Retailers

Government

Google

ASPs

Telco (Retail)

Millions of Customers

Thousands of Segments

OTT Products

Protected Products

Packets

PLATFORM:

E-Commerce

IT & SDP

Wholesale Access

$$ $$

Source : Telco 2.0 Forum www.Telco2.NetSource : Telco 2.0 Forum www.Telco2.Net

Content

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Broadband as the Driver of Growth

A New Game for Everyone

Source: Gerd Leonhard, (www.mediafuturist.com) Open is King

Seamless Mobility - TIMELocation, Time and Device Agnostic

Watch TV onTrain, ProgramDVR for Tonight

Find Child’s GPSLocation on TV

Download theLatest Tunes

Schedule a Meeting

ConferenceFace-to-Face

Make Wait TimeProductive

Work from Home

Watch Showson Demand,Answer VideoCall on TV

Conduct TelepresenceMeeting

Keep YOU Informed, Connected, Entertained and Secure as You Move Through Life -at Home, at Work, and on the Go

Customer TransitionRise of the Empowered Consumer

Provider to UserProvider to User

User to ProviderUser to Provider

ExperienceExperience

PassiveWatch Broadcast TV

BroadcastOne Service Fits All

PickVideo On Demand

TransactNetwork Responsiveness

ParticipateCommunity Services

InteractPersonalization, Socialization

ProduceCreate/Remix Content

EmpowerComplete Customization

Number of services

Mar

ket s

hare

co

rres

pond

ed

Core ServicesCore Services

Mission Critical ServicesSituational Services

Open CooperationOpen Cooperation Web 2.0Web 2.0

Performance, reliability, QoS, ...

Rapid development

In house – specific skill Communities – no specific skill

Best Effort

Service Life-Cycle

Opening to 3rd party service revenues

Towards Long Tail service revenues

Service ExposureReduce cost and reuse

Create profitable

new business models Capture

revenue and participate to

long tail

Content

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Indonesia ICT Penetrationas of July 2008

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� TELKOM 99%� BBT <1%

� Telkomsel 46%� Indosat 28%� XL 20%� Mobile-8 3%� Hutch-3 3%

� TelkomFlexi 51%� Esia 41%� StarOne 6%� Mobile-8 2%

8,6 M8,6 M 14,96 M14,96 M 120,46 M120,46 M 35 M35 M 6 M6 M

� Internet Kiosk 43%� Campuses 3%� Schools 1%� Offices 41%� Households 12%

� Speedy 65% (600K)��� Wireless BB � (Telkomsel 70%)�� Others

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Note :Note :Indonesia population around 230 millionIndonesia population around 230 million 2009

~ 80%

Indonesia is a Country with the Largest Number of Wireless Operators in the World

(11 Operators with 23 brands/products)

Indonesia’s Wireless Market

Sumber : Mobile World

However, competition in the future will be intensified as several new entrants supported by global players joined the industry and have

been in the market (Data: Oct 2008)

From the most expensive to the cheapest

Competition in the Indonesian mobile business

has driven down prices considerably in past 24

months

This has resulted in tariffs moving from being one of the most expensive in the

region to one of the cheapest

ImpactImpact

RPM Comparison in 2005 RPM Comparison today

Problem : Lack of LOCAL CONTENT! Problem : Lack of LOCAL CONTENT!

•• 3G users are at about 6 millions3G users are at about 6 millions

•• Most of them are using HIGH SPEED INTERNETMost of them are using HIGH SPEED INTERNET

•• No other killer application!No other killer application!

Sources: detikinet.com, 2008 and SHARING VISION 2009Sources: detikinet.com, 2008 and SHARING VISION 2009

““Are 3G subscribers REALLY USING 3GAre 3G subscribers REALLY USING 3G??””

3G Subscribers Expectation:Price, Quality and... CONTENT!

SSourceource: : SHARING VISIONSHARING VISIONTMTM, 3G Market Survey, n = 100 , 3G Market Survey, n = 100 RespondenResponden, April 2008, April 2008

TotalTotal

BandungBandungJakartaJakarta

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Providing Platform for Content and Applicationis Must for Surviving !Surviving !

Source : Fokus Fraunhofer

TELKOM Approach for Providing Content and Application Platform : Nurturing Digital Life Style

Customer Experience &

Empowerment Thru Rich Content

ConvergedInfrastructure

Integrated BusinessOperation

ServiceMashup Orchestration

SDPSDPNGNNGN--IMSIMS

CommunityCommunity

Roadmap to NGN-IMS and SDP

• 2008 – Platform Consolidation to NGN in order to support broadband and network simplification, One Platform to fit for all access and services

• 2009 – Flexible Services and mobility, Flexi a Wireless Connectivity as a priority solution.

• BW Internet : Global 40 Gb, Domestik 40 GB• SDP ReadinessSDP Readiness

• 2010 - Deliver IPTV via Triple Play network, one step to Digital Entertainment Era at home.

• 2012 - Fixed and Mobile Convergence , a technology to shift the operator paradigm to serve competitive services

• 2011 – Development of Content Biz Model, Step to Full Network and Service Provider

• 2014 – Full Convergence, Broadband and rich Application, The Future Lifestyle

• 2013 – Data Connectivity, dominant revenue and the best player data provider in the Region

• 2007 – TDM for BB & NB Acces Connectivity• BW Internet : Global 5 Gb, Domestik 5 GB

SDP (Service Delivery Platform) : For Service Exposure in the Long Tail Business Model

Wireline Broadband

SDPService Delivery Platform

Wireless

IT/Applications Content ServicesPORTAL

OSSBSS

Benefit of SDP :

• Integrated single platform with open architecture for all services

• Allows TELKOM to discover new business opportunities and models at “Internet Speed”

• Simplifies planning of network and services

• Reduces urgency to move to all IP-core network

• Platform for service aggregation across networks and devices

Integrated Business Operation : From Reactive to Proactive Service

Service Operations & QualityService Operations & Quality Network OperationsNetwork Operations

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Standardized & Integrated INFUSION Application

360���� view

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Customer ServiceCustomer Service

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Pleasant EnvironmentPleasant Environment

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Indigo Implementation : Community and Creativity Building

Indigo : Content IncubationCreative Content Incubation- Band Community blog.- Indie & Music News.- Review album.- Music distro.[music webstore].- Chart musik & rating.- Interactive discussion.- Music Fashion.- E Magazine download.- Band of the month.- Music program content.- Music Collaboration - “FREE” Download and Streaming- Widget and Links

Digital Asset Management

Digital Content & Applications

Digital Payment

The Infrastructure

Broadband & BroadcastBroadband & Broadcast

Service Platform

copyrightprotection

portalSDP mediaserver

Digital Content & Applications

Game Education Music Animation Schools Govt SMEs

Digital Payment

A New Integrated Strategy NEEDED to SURVIVE!

� Broadband and 3G as ACCESSACCESS� Life style of customer as SERVICE EXPERIENCE FOCUSSERVICE EXPERIENCE FOCUS� PROSUMER or CROWDSOURCING as paradigmparadigm� SDP as Orchestrating PlattformOrchestrating Plattform� NGN-IMS as Backbone NetworkBackbone Network

� People CREATIVITY and INNOVATION as main objectives� Which will create INNOVATION ECONOMYINNOVATION ECONOMY!

� Through

� Supported by and !

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