Title: USO Regulatory Support for Fund Raising in Indonesia
1USO Regulatory Support for Fund Raising in
Indonesia
Benyamin SuraArif Wismadi
- Directorate General of Post and Telecommunication
- The Republic of Indonesia
- Asia Pasific Forum on Telecommunication Policy
and Regulation - 10-12 July, Chiang Rai, Thailand
2Contents
- Indonesia Overview
- Telecom Development Strategy through USO Program
- USO Funding
- Issues on USO, Technology and Funding
3Indonesia Overview
- The largest archipelago (consists of 17,508
islands) - More than 220 million in population
4Current Condition
- Infrastructures
- 7.82 millions of fixed line (3 penetration )
- 11 millions of cellular phones users
Low teledensity in rurals (0.2 ) 43.022
villages (64.4 out of 66.778 vilages) have-no
telephone access.
High teledensity in metropolists ( 11 - 25 )
Need more investment mostly in villages with
no-access
5Problems
- Investment on fixed-lines needs high-capital with
low RoI(Return on Investment) - Development of fixed lines in rural areas is much
more expensive (not attractive in business point
of view) - Government budgets on telecommunication
development was no longer extended since 1985.
6General Strategy for National Telecom Development
Strategy of Telecom Development
Target the adequacy of telecom and information
access
Telecom development in Non-commercial regions
(USO)
Telecom provisions in Commercial
regions (Competitive / non-USO)
7Regulation in Commercial Regions
Industry Monitoring
- Equal access - Market Openness - Investment
Funding
Decision-making Mechanism
Requires a Strong and Credible Independent
Regulatory Body (IRB)
Establishment of IRB by strengthening the
existing regulatory body
8USO Development
Targets
Funding
Technology
- Rural villages - Household - Service advancement
- Operator contribution - Govt. budget - Local
contribution - Grant
Government Duty c.q DG of Post and
Telecommunication
Supported by - Telecom Operators - Local
Government
9USO Scheme
- Infrastructure-wise
- infrastructure provision is required to provide
access to the community - Information-wise
- introduce new technologies through social streams
(education, training, seminars)
10Universal Service Obligation(USO)
- USO in Indonesia
- Community Access Within Walking Range
- Provision of basic telephony services,
- Priority will be given to areas with
- existing technical support (site, electricity,
and if possible close distance to a telephone
central) - Economically viable/potential
- USO will be a long-term, continuous and
sustainable process
11USO in Indonesia
- By the end of Year 2005 every district capital
and village in Indonesia will be provided with
basic telephony service (including fax,dial-up
internet and low speed data/9600 Bps) - Each village will be provided with at least 1
Line Unit - Normal rate will be applied and certain
additional costs (such as frequency use,
interconnection) will be temporarily waived - USO is expected to bring positive changes to the
area so that termination of USO status is
possible and hence waived costs will be applied
12Deployment Scheme
Year I (2003)
Year II (2004)
Year III (2005)
Target 17,000 villages Area Java, Sumatera,
Kalimantan, Eastern Islands Source of Funding
Operator contribution
Target 18,522 villages Area Sumatera,
Kalimantan, Eastern Islands Source of Funding
Operator Contribution
Target 7,500 villages 870
municipalities Area Sumatera, Kalimantan,
Eastern Islands Source of Funding State Budget
The technology to be implemented is based on the
USO regions geographical and infrastructure
characteristics ? alternatives cable
(wireline), wireless (radio), satellite
13USO Funding
- For the 1st year (2003), USO implementation (for
7,500 villages 870 municipals) will be funded
by the state budget - For the years to come, USO will be funded by
telecom operators by contributing 1 of their
gross revenue
14Uso Funding
- USO funding scheme
- State Budget
- Operator Contribution
- Local Government Contribution
- Grant
- Operator Contribution Network, Services,
Interconnection - Allocation Investment, Operation, Maintenance
15USO funding scheme 1st year
Communication Sector
State Government
Non-Tax State Revenue
The Use Right Costs
State Treasury
State Budget
Sector Budget
Local Government
USO
Investment
Land Acquisition
Grant
16USO funding scheme 2nd, 3rd year
Communication Sector
State Government
Non-Tax State Revenue
USO Contribution 1
State Treasury
USO
Local Government
Investment
Land Acquisition
Operation
Maintenance
Grant
17Issues USO, Technology and Fund
- USO concepts
- penetration vs penetration to tariff principles
and access prices - Technology
- Wire line, Radio terrestrial, VSAT, Satellite
- 90 USO villages rely on satellite technology
- Implication on tariff interconnection
- Regulation/legal issues USO fixed vs mobile,
- Consequences on operator contributions
- Investment
- Operation
18Possible Options
- USO implementation
- Penetration (1st year) TO penetration to tariff
principles and access prices (2nd and 3rd year) - Requires research on affordability to define
tariff subsidies - Technology
- Increase number of the hub to reduce
interconnection - Regulation/legal issues USO limited mobility,
coverage meets demand - Consequences on operator contributions
- Interconnection contribution from network
provider
19USO Deployment Scheme
20Information-wise
- Education
- School 2000 program, accelerating internet access
from schools. ICT awareness and capacity should
be encouraged at the earliest stage possible. - Internet cafe in schools with
- Soft loan for computers
- Free Internet access and 50 discount of local
access. - Internet Roadshow
- Seminars and workshops for the society in rural/
sub-urban areas. The seminars are focused on
giving fundamental information about the internet
21THANK YOU FOR YOUR KIND ATTENTION