1. Summary of Indonesia Country Report Arif Wismadi ADB/ITU Project on “Rural Information and Communications Technology Policy Advocacy, Knowledge Sharing, and Capacity Building” 23rd – 24th March 2011 Menara Peninsula Hotel, Jakarta, Indonesia Indonesia Country Workshop on Rural ICT Development

2. Contents Introduction to the workshop The structure of country report The expected contribution of the sessions

3. Introduction The Workshop is organised within the framework of the joint ITU/ADB Project on “Rural ICT Policy Advocacy, Capacity Building and Knowledge Sharing”. The project is envisaged to lead to the promotion and deployment of rural ICT development as well as to enhance the human capacities of regulators and policy makers in Asia-Pacific countries through development of toolkit for policy makers and knowledge sharing and human capacity building. The project is undertaking of nine country case studies which include: Cambodia, Mongolia, India, Indonesia, Malaysia, People’s Republic of China, Republic of Korea, Philippines, and Thailand.

4. Workshop Objectives Review and validate the interim country report; Obtain additional data and information as well as comments and suggestions from local stakeholders, invited experts, participants of the Workshop with an aim to enrich and finalise the report; Provide an opportunity for stakeholder discussions on issues and matters related to rural ICT development which would lead to some recommendations for policy makers; Promote collaboration and partnerships among local and international organisations and private sector.

5. The Structure of Country Report Chapter 1, Country Overview Chapter 2, National ICT Industry Status Chapter 3, Status of Rural ICT in Indonesia Chapter 4, Rural ICT Policies, Programs, Initiatives Chapter 5, Case Examples of successful and innovative rural ICT projects Chapter 6, Lessons, Opportunities, Constraints

6. Chapter 1 Country Overview 1.1National geographic, demographic status – Spatial disparity and decentralize process. – High unemployment, 9 out of 10 are unemployed (160.81 mio of workforces). – HH income level < 1200 USD/year. – Gini index: increased 0.343 to 0.374 – Poverty incident 15,42% (34,96 mio pop) 2008. SESSIONS: National Policy on Intersectoral Approach for Rural ICT Development Rural ICT for increasing the capacity of rural community

7. Chapter 1 Country Overview 1.2Scope and status of rural areas, population – 75.666 villages, 63.52 percent of the poor in rural areas. SESSIONS: National Policy on Intersectoral Approach for Rural ICT Development Rural ICT for increasing the capacity of rural community Role of ICT to promote tourism industry, post disaster experience in Jogja

8. Chapter 2 National ICT Industry Status 2.1ICT Market Background of Indonesia – Liberalization and competition started where penetration and coverage is still inadequate. 2.2ICT Regulatory Body – Independent Regulatory Body (IRB) to protect public right and interest, to support and to protect telecommunication business competition. SESSIONS: Regulatory Framework to sustain Rural ICT services: managing competition to sustain national ICT infrastructure National Policy on Rural ICT: the transition and its lesson learnt

9. Chapter 2 National ICT Industry Status 2.3ICT Industry Role for Indonesian Economy – ICT sector with increased growth 29% and share 1.96 (% GDP) 2.4Telecommunication Industry Status – Big market. Big investment. Providers increase 2.2%. Network Capacity grows 42.5% - 156.2%. SESSIONS: Regulatory Framework to sustain Rural ICT services: managing competition to sustain national ICT infrastructure National Policy on Rural ICT: the transition and its lesson learnt How commercial Internet Provider deals with rural area Lesson learnt on serving rural banking

10. Chapter 3 Status of Rural ICT in Indonesia 3.1The Digital Divide – Infrastructure (86%) in Sumatera, Java and Bali. Only 14% in Eastern Indonesia. 3.2ICT Penetration in Rural Area – High potential demand, low economy – Tele-density of Urban 35%, or at least 11-25%, Rural 0.25%. 3.3Technology Utilization of Rural IC in Indonesia – Technology to technology neutral SESSIONS: Initiative to serve the unserved Community Based ICT Center Initiative: a CSR initiative toward market maturity Role of SME in Rural ICT development: contribution for affordable solutions SME in ICT: local content, job-opportunity and the capacity

11. Chapter 4 Rural ICT Policies, Programs, Initiatives 4.1. Background – Rural: high capital, low RoI – Affordability and rural specific demand 4.2. History – Monopoly: Operational Cooperation scheme, doubled rural access, ‘93-’97 – Liberalized : introduce USO program, USO Fund – Rural Telecommunication Authority – Auction process – Output to outcome: Performance based contract SESSIONS: Implementation of USO Program in Indonesia: from regulatory conformance toward development performance Options for Rural ICT Applications: market pull or technology push? The benefits of Broadband

12. Chapter 5 Case Examples of successful and innovative rural ICT projects Case 1: – Local Government Initiative for E-Gov, Regency of Sragen Case 2: – Central Government Infrastructure Provision: USO Program Case 3: – Private Initiative Rural ICT Provision: Community ICT Center Case 4: – Central Government Activity Based Infrastructure: E- Learning (Jardiknas) SESSIONS: Lesson from Jardiknas Program, critical success factors for rural e-learning E-government initiative: changing the mindset Managing Community ICT Center: the important factors to scaling up the model

13. Chapter 6 Lessons, Opportunities, Constraints This section highlight lessons learned, opportunities for further development of national rural ICT policy, and constraints that may impede such development. This section provides specific findings that can be transferred to other countries of the region, and potentially incorporated in toolkits and other resources. SESSIONS: Deployment Challenge of Rural ICT Infrastructure: critical aspects to avoid cost and time overrun Performance based contract to sustain ICT service: operator’s perspective: the driving factors to business process re-engineering ICT infrastructure to monitor rural ICT services: SIMMLIK: do they comply to the contract?

14. Thank You Interim Report available at: http://www.itu.int/ITU-D/asp/CMS/Events/2011/ITU-ADB/Indonesia/index.asp Email contact: pustral-ugm@indo.net.id