Convergence in Indonesia Hype or reality

1
Convergence in IndonesiaHype or reality ?

• Suryatin Setiawan
• RisTI TELKOM
• Jakarta May 2000

2
Convergence

• User level
• User appliances that provides access of
  multimedia or full range of services over the
  same apparatus
• Access level
• A broadband access network that allow access of
  multimedia services
• Industry level
• A trend in the industry that blends the telecom,
  internet/ data and video entertainment into one
  infocom industry
• Regulatory level
• An approach by the government to regulate the
  industry as one single full service industry

3
The reality in Indonesia

• User level
• User are not familiar to operate services other
  than telephone
• User appliances does not provide the easy access
  to converged services
• Access level
• Majority of wire-line access, if not all, are
  still at telephony quality
• Wireless access offers a more clearer promise on
  access to converged services ( 3G)
• Industry level
• Although Indonesia has had the opportunity to
  nicely arrange the industry directly admitting
  the convergence, Indonesia has failed to do it
  and industry has been growing like a copy of US
  industry long time ago
• Regulatory level
• Is the most important but also the most difficult
  entity to quickly adapt into convergence. Thats
  part of the reason why Indonesia has missed the
  opportunity to modernize the industry ahead of
  all developed economies

4
The rest are hype in Indonesia

• User level
• With projected 384K subscriber / 1.450 million
  users of internet and some tens of thousand of
  cable users, convergence is really at its early
  stage
• User devices do not support convergence
• Access level
• 6 millions wireline access and 2.2 Million
  wireless cellular are mostly normal telephone
  quality access
• Industry level
• Telco and cable / multimedia providers are really
  separated, using separated infrastructure and
  having separated licenses from different
  government agencies
• Regulatory level
• Ditjen Postel has been trying to accommodate
  telematique into their structure , while
  Deperindag doing also e-commerce related matter

5
Infrastructure is the foundation

• With telephone POTS wireline is only 6.6 / 8.4
  (2004) out of 210 mill people cellular 2.2/ 8.1
  (2004) mill, Indonesia does not belong to
  information intensive economy
• Convergence is not an issue until infrastructure
  is widely available and accessible to the people
  so that the people are trained and used to
  communicate with modern digital and cyber way of
  communicating
• Its not foresee-able a capacity to build
  infrastructure at the rate of 1 mill access wire
  line per year while Indonesia to become
  competitive infocom society would need at least
  23 to 52 million Hh access ( 2004) distributed
  appropriately according the demography

6
Infrastructure and the USO

• Access lines to be added needs 17.5 billion USD
  if the average of Hh extremes is going to be
  given the access to information
• Convergence in access level will require 3.7
  billion USD if half of the copper base access
  lines would be transformed into real broadband
  access
• 2.5 and 3G wireless cellular will require more
• The USO must be in place with strong and accurate
  control to make sure that those who can not
  afford a private phone are still having access

7
Impact to user

• For an economy like Indonesia convergence is the
  main driver for digital divide to happen with
  the current crisis , it is expectable that DD
  will hit Indonesia seriously
• For some Indonesian, convergence and e-life will
  assure their global competitiveness
• Major strong companies shall keep up with the
  progress of convergence by endorsing IT based
  business processes in the company
• Government and industries shall jointly promoting
  the usage of internet and e-education in high
  schools and lower

8
The industryany chance ?

• The electronic , especially telecom manufacturing
  industry has lost its golden time , unlikely
  able to sustain the pressure of technology
  development and competitiion of an open market
• The service industry has been very conservative
  in developing the infrastructure since the crisis
  started
• The opportunity remains only in software
  industry, but leadership , credibility to build
  track record is required and not easy to gain

9
Steps that can be done

• When socio economy environment are back on track
  then
• Establish strong and credible regulatory
  environment
• Define tariff policy for POTS
• Encourage more investors as players
• Promoting Indonesia Infocom industry to foster
  socio economic development of Indonesia
• Telematika does not need GoI driven
  coordination effort, what needed is the creation
  of legislation and regulation that encourage the
  convergence and the Infocom sector development
  and E-Government to lead the usage of e-service
  and technology in the society
• Giving support and incentive to soft and
  knowledge based industries and protecting
  competition from being self destructive
• Train and educate the people to go for e-life

10
Convergence is still a hype

• Before convergence can have impact to Indonesia,
  major basic steps must be taken seriously
• Reformation must continue
• Economy must back into its track ( require clear
  and consistent policy and political stability)
• Sector shall be correctly redesigned
• Industry is moving
• People is benefiting
• Unfortunately, the infocom society and industry
  is a global reality that no economy can escape,
  so be patient and stay at home