1. Becoming Telco 2.0 Toward Knowledge Based Economy Arief Mustain Sesindo 2010 Surabaya, 4-Desember-2010

2. 2 Content Knowledge based Economy Overview Knowledge Based Economy Players Becoming Telco 2.0

3. Infrastructure and technology Computers in schools/home Digital TV transition Convergent services and devices Spectrum planning and licensing Broadband Access Availability Ensuring all potential users have the skills to access the digital economy Digital/ICT literacy Community readiness/connectivity ICT skills training (students and teachers) Government Leadership Opportunities for innovative content and application creation for community and commercial use Content regulation (online and convergent devices) Codes of practice (broadcasting and internet regulation) A secure and trusted environment for digital information E-security, Cyber-safety Identity management IPv6 Readiness Service reliability Future proof technology adoption To capitalise on the growing knowledge based economy, we need to consider: ConnectivityCapabilities ContentConfidence

4. Infrastructure and technology Computers in schools/home Digital TV transition Convergent services and devices Spectrum planning and licensing Broadband Access Availability Ensuring all potential users have the skills to access the digital economy Digital/ICT literacy Community readiness/connectivity ICT skills training (students and teachers) Government Leadership To capitalise on the growing knowledge based economy, we need to consider: ConnectivityCapabilities Even companies that have made significant investments in information technology are not getting the results they could be. What's interesting is that the gap is not the result of a lack of technology spending. In fact, most companies have invested in the basic building blocks: PCs for productivity applications; networks and electronic mail (e-mail) for communications; basic business applications. The typical company has made 80 percent of the investment in the technology that can give it a healthy flow of information yet is typically getting only 20 percent of the benefits that are now possible. The gap between what companies are spending and what they're getting stems from the combination of not understanding what is possible and not seeing the potential when you use technology to move the right information quickly to everyone in the company.

5. Country ICT Indicators

6. The growing of knowledge based economy will be determined by the closest element around users; devices

7. PC/NB WiFi Enable Gadget TV Set (#Household Proxy) M2M (Beyond Population) Softbank AT&T BT GoogleTV Apple TV Bharti (200k) PLTD (25k) Verizon Deutsch Telekom Solution based Industrial related Internet Service Social Networking Multimedia Ent. Personal Productivity & Entertainment ISP CSP Internet Service Home & Office Key Challenges: Affordability Declining prices of broadband services will boost adoption Availability Increased network coverage using multiple technologies platforms will boost broadband adoption Rich Content & Application Increased popularity of ‘bandwidth intensive’ content (e.g. YouTube, Skype talk, IM, social networking) both globally and in Indonesia will lead increased broadband uptake The growing of knowledge based economy considering beyond population opportunity as well

8. The Challenge of the Value Chain Convergence

9. The convergence device, the closest element around us Is it a computer (due to its OS and applications) ? Is it a communication device (phone function, Internet access) ? Is it a multimedia device (video cam, video streaming, etc) ?

10. The digital economy will also be vital, but Australia currently lags in broadband penetration and speed Source: OECD, Broadband Statistics to June 2007; OECD, Broadband Statistics to Oct 2007 Our broadband penetration leads the OECD average but trails the leaders......our speed is below average compared to international peers

11. To meet these challenges, the economy will need to be flexible, productive, and highly participative Sustainable growth A working economy A flexible economy A productive economy Covered in Education, Skills And The Productivity Agenda Human capital investment High Participation rates Covered in this stream Infrastructure Market efficiency Competition Regulation Mobility Digital Capacity

12. Knowledge Based Economy Services

13. KBE Strategy – South Korea Case Source:KISDI

14. 14 Transform Knowledge Based Economy Sectors, Government and Society using Infocomm Digital Media & Entertainment Education & Learning Government Healthcare & Biomedical Sciences Manufacturing & Logistics Tourism, Hospitality & Retail Financial Services Ultra-high speed, pervasive, intelligent and trusted infocomm infrastructure Globally competitive infocomm industry Infocomm-savvy workforce and globally competitive infocomm manpower Singapore Case – Source:IDA

15. Bangun Sektor Industri (Year 2020)........ Industri Telematika merupakan salah satu pilar dari Tiga Pilar Utama pada bangun industri masa depan....... SDA TERBARUKAN SUMBER DAYA MANUSIA SDA TDK TERBARUKAN PETROKIMIA, SEMEN, BAJA, DLL TPT, SEPATU, ELEKTRONIK, DLL INDUSTRI BARANG MODAL INDUSTRI KOMPONEN (BASIS UKM) INDUSTRI AGRO INDUSTRI TELEMATIKA INDUSTRI TRANSPORT INDUSTRI NASIONAL TAHUN 2020 INDUSTRI MASA DEPAN BASIS INDUSTRI MANUFAKTUR 15 Source: Paparan Menteri Perindustrian Pada Rakornas 2009

16. 32 priority industries chosen out of 365 industries, with total output 78% total export 83% Focus Priority Industries CPO; Fish processing; Rubber;Timber;Tobacco;Cacao;Coffee;Fruit;Sugar.CPO; Rubber;Timber;Tobacco;Cacao;Coffee;Fruit;Sugar. I. Agro Automotive;Maritime;Aircraft;Rail.Automotive;Maritime;Aircraft;Rail. II. Transportation Equipments Textile; Ceramic Paper & pulp; Cement; Steel; Electrical device; Agriculture machine; Factory, construction & mining machine / equipments. Textile; Ceramic Paper & pulp; Cement; Steel; Electrical device; Agriculture machine; Factory, construction & mining machine / equipments. Craft and art; Precious stone & jewelry; Decoration ceramic; Atsiri oil; Snack. Craft and art; Precious stone & jewelry; Decoration ceramic; Atsiri oil; Snack. V. Small Medium Industries IV. Manufacture Industry Base III. ICT Hardware, Software, Telecommunication Devices INDUSTRI PRIORITAS 16 Source: Paparan Menteri Perindustrian Pada Rakornas 2009

17. Indonesia Connected 17 Hubungan ICT dengan pertumbuhan ekonomi Kominfo berkontribusi pada pertumbuhan ekonomi melalui 3 jalur:Kekuatan ekonomi, Kekuatan Intelektual, Kekuatan sosial (a) (b) (c) Human Capital (Pendidikan, SDM, Pengetahuan, Informasi, dll) Social Capital (fondasi penting bagi masyarakat wilayah, pemerintahan,dll) (A) (B) (C) Kekuatan Ekonomi First impact second impact PEMBANGUNAN ICT PERTUMBUHAN EKONOMI Elemen Produksi (Kapital, Tenaga Kerja,dll) Produktifitas (Inovasi, Perbaikan Managemen) Inovasi (Litbang) Investasi ICT Informatisasi Pendidikan (e-pendidikan) Komunitas on-line Keterbukaan Informasi Kekuatan Intelektual Kekuatan Sosial

18. 18 Content Knowledge Based Economy Players Knowledge based Economy Overview Becoming Telco 2.0

19. Rethinking Market in The Knowledge Based Economy Point of View Core Services, Partner Services and Marketplace Services required specific competencies and should be reflected on organizational structure as well. It started from product development toward marketing strategy as well as channel preference for each service categories. The long tail economy models are in place

20. DotCom valuations are very attractive relative to telcos Combined Revenues ($B) Combined Market Valuation ($B) Portals/ Internet Telcos Media / Content Global Top 3 Source: Yahoo Finance (Jan 2008), SEC Filings, A.T. Kearney analysis 7.6 0.9 1.5 Revenue multiple DotCom Valuation

21. Will Googles world give the impact Telco Operators? Source: http://www.telco2.net/blog/2008/03/google_vs_telcos_the_tale_of_t.html

22. 22 Indonesia’s Telco Industry Landscape There are 11 operators serving more than 234 Mn population, in which 56% of them are young dynamic population… Population by Age Indonesia population  Population: approx. 234 million +  Young dynamic population 56% Operators

23. 23 Indonesia ICT Penetration Mobile/ Cellular (GSM) Fixed Wireline Fixed Wireless InternetBroadband TELKOM 99% INDOSAT BBT Telkomsel 46% Indosat XL-Axiata Hutch-3 AXIS TelkomFlexi 57% Esia StarOne Mobile-8 8,7 M 28 M 180 M 35 M 3,9 M Internet Kiosk Campuses Schools Offices Households Fixed BB Speedy 1,16 M (76%)‏ Mobile BB 2,2 M (Telkomsel 66%)‏ Others 4% Penetration 12% Penetration 77% Penetration 15% Penetration 2% Penetration Note : Indonesia population around 234 million Amid intensifying competition, Telkom remains market leader in all product lines March 2010

24. 24 Indonesia’s broadband penetration is still low compared to other countries in the region – significant upside potential Residential Fixed Broadband Penetration Percentage of households Developed Nations* Regional Average India China Thailand Vietnam Malaysia Philippines Indonesia *Average of USA, Canada, Germany, France, UK, Singapore Source:Pyramid, ITU, Ovum GNI per capita PPP USD thousands 9.5 9.0 8.5 8.0 7.5 7.0 6.54.5 4.0 3.5 3.0 2.5 2.0 Morocco Residential Fixed Broadband Penetration Percentage of households Ukraine Egypt Nigeria Pakistan Brazil Colombia China Thailand Vietnam Philippines Indonesia India

25. Indonesia’s ICT Market Size - 2009 (Trillion IDR)

26. Peluang dari bisnis Content Top Five DotCom (from alexa.com) 1. baidu.com (local content)aidu.com 2. qq.com (local content)qq.com 3.taobao.com (local content)taobao.com 4. gogle.com.hk 5. sina.com.cn (local content)sina.com.cn China Japan Korea 1. yahoo.co.j) 2.google.co.jp 3. fc2.com 4. youtube.com 5. ameblo.jp (loacal content) 1. naver.com (local content) 2. google.com 3. yahoo.com 4. daum.net (local content) 5. facebook.com 1. facebook.com) 2. google.co.id. 3. google.com 4. yahoo.com 5. blogger.com Indonesia 6. kaskus.us

27. 27 Content Becoming Telco 2.0 Knowledge based Economy Overview Knowledge Based Economy Players

28. Service Providers are headed for change Source : Cisco

29. Strategy of broadening “T(elecoms)” : Broad top, sleek bottom Source : Fokus Fraunhofer Service Control SDP & IMS Focus Symphony Be Different

30. Two Sided Market Architecture Key Success Factors: Menyediakan “Creative PlayGround” yang memungkinkan application developers (upstream customers) mengembangkan berbagai application/services dengan mengoptimalkan Telco Assests & Capabilities Optimalisasi Web2.0 untuk memaintain komunitas “Pro-sumers”

31. Customers are taking control : “me”-era

32. New Telco Architecture

33. Rethinking on Business Model

34. Distribution Cloud Users UI Services & Apps OSS-BSS-SDP (Enabler) Content (Game, Music, Education, Sport) OS & Devices Portal Power Play Telco (Device-Network-Apps) Content & Apps. as benefit leader to core services Source : Amdocs (adopted), Telco 2.0 Conference, 2009 ubiquitous Core Service 3 rd Party Partnership

35. Collaborative Innovation Environment Source: Kuiper, TNO 2009 Strengthening Innovation via collaboration with crowdsourcing

36. Strengthening Innovation via collaboration with Social Media

37. Terima Kasih