Toward Broadband Economy

Through Innovative Regulations

Yoseph Garo
VP . Interconnect and Regulatory
PT . TELKOMSEL INDONESIA

1
 Wireless Operator Views On Broadband
Economy

Drivers for Broadband Economy

Industry Trends and Challenges

Potential of Mobile Broadband

Regulatory Issues to be Consider &

Innovative Regulation

Conclusions

2
 Wireless Operator Views on
Broadband Economy
•Broadband Infrastructure Development is the essential Platform to
support Broadband Economy

•Extensive use of Broadband Service , increase ICT role as drivers for

broadband Economy and have
impact in form of :
•Consumer surplus
•Quality of life
•Enabled user created content ( UCC )
•ICT - enabled innovation driven by individuals
•SMEs

•Broadband Economy will explode Bandwidth Requirement ( Bandwidth within

Network and
International Bandwidth ) as the result of increasing Data
Traffic by :
•Increasing numbers of Broadband Applications and Services
•Increasing Perceived User Value of Mobile device for
broadband Economy Activity
•Increasing numbers of Broadband User

•Higher BandwithCapacity Requirement result to Higher Operator ’ s

Investment that should be
treated carefully to balance risk of investment
•It is not necessarily increase of Profit of Operators
•Trade Strategy between Revenue and Cost still need further
evaluation .
•
•Broadband Economy is not a single system but Ecosystem , it requires
synergies among drivers

3
 Consumer Surplus as impact of
Broadband
•High speed broadband networks bring about lower search and information
cost and
greater access to information, which makes price comparisons easier,
increases
competition and creates a downward pressure on prices.
•
•They also enable the increased customisation of goods and services and
the ensuing improved and/or better adapted quality. This process not only
affects online commerce but also can affect offline shopping when people
search for information and compare prices online before going to a shop
to make the actual purchase.

•The resulting empowerment of the individual through the use of broadband

networks constitutes a very important economic impact and brings about a
restructuring of the relationship between customers and suppliers,
notably by increasing the consumer surplus.
•
•There are also new broadband enabled services that give consumers direct
access to lower cost services abroad
•
•Increasingly, triple play offers allow consumer surplus gains as data,
voice and video (even ―quadruple play‖ offers which also include mobile
voice) can now all be obtained through one subscription with a single
provider.
•

4
 Quality Of Life

Broadband is changing the way families learn, communicate, play and prepare for their future. Critically
important information about health care, scholarships, colleges, jobs, and community life such as driver's
licenses or registering to vote is increasingly on the Internet, and sometimes only on the Internet. In many
rural communities, because jobs have migrated to urban areas, high school graduates often \ feel they
have only two choices - go away, or go nowhere. Broadband is the connection to new markets, new jobs, and
to distant family and friends.

•Student can complete a university degree •Small business can reach new market
online demand skills as they need them
•All people , no matter where they live , can be •Rural Broadband may help the
no more than a keystroke or a mouse click Citizens to learn by online and job
away from the jobs and opportunities that opportunities that stimulate local
broadband both creates and support economy
•Doctros in urban area can diagnose patients •For the Economy , Broadband can
in rural areas or consult with experts from create Economic Growth ; Expand
around the world . region Global
•Empleyess from around the world can competitiveness , create high wage
collaborate on projects in real time or gain jobs ; raising standard of
“ on demand skills as they need them living ; allow SMEs to reach Global
•Citizens can register their cars , buy license Market .
and pay parking tikets online , saving time •For Environtment , Broadband could
and money save on transportation polution and
•People can play a greater role in deomocracy other saving in environment
as blogger . Online activist or movie creator perspectives to provide better
•Consumers can benefit from competition in environment
more const efficient way , lowering cost but •For Government , Broadband can
increasing choice increase accountability ,
•Chlidren in the most isolated inner city transparancyand Coordination for
neighborhood or rural region can acesss the all Government Programs from
same universe of knowledge , transforming planning until monitoring across
teachers teachand student learn the country . It also provide strong
•Parent can keep on top of their children ’ s tools for measuring and evaluating
homework and be in contact with their and reporting as well as Reducing
teacher Coruptionand others Policy Making
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•A Shop owner with good idea ad an internet Tools
connection can become a corner store in
 Enabled user created content ( UCC )

•The Internet as a new creative outlet has altered the economics

of information production and led to the increasing
democratisationof media production and changes in the nature of
communication and social relationships.
•
•It changes in the way users produce, distribute, access and re-use
information, knowledge and entertainment potentially give rise to
increased user autonomy, increased participation and increased
diversity.
•
•ICTs and broadband create new ways for companies to exploit the
creativity and innovativeness of their workforce. Blogs, wikis,
podcasting, tagging technologies, and lessons of community and
social networking sites are increasingly seen as important tools
to improve the efficiency of employees

•These may result in lower entry barriers, distribution costs and

user costs and greater diversity of works as digital shelf space
is almost limitless

6
 SMEs Alteration

•SMEs are very important in the economy as they tend to represent a very large
share of
businesses.
•Broadband can help to empower small and medium-sized firms, enabling them to
compete with
larger firms in an increasing number of markets and purchase services they
previously could not
afford.

•At the same time, broadband and ICT-enabled trade in services also offer SMEs
increased market access abroad and opportunities to become part of the value
chain of production of other, larger, firms.

•The Internet as a new creative outlet has altered the economics of information
production and led to the increasing democratisationof media production and
changes in the nature of communication and social relationships.
•
•It changes in the way users produce, distribute, access and re-use information,
knowledge and entertainment potentially give rise to increased user autonomy,
increased participation and increased diversity.
•
•These may result in lower entry barriers, distribution costs and user costs
and greater diversity of works as digital shelf space is almost limitless

7
 Drivers for Broadband Economy

Technologies Markets

Applications Services

Regulations

Policies

Identification of Industry Trends are crucial in Supporting

8
 Telco Industry Trends (1)

•Telco Industry trends is toward Fixed / Mobile Convergence , based on

the “ IMS ” platform
•A multi - service multi - protocol , multi - access , IP based network
- secure , reliable and trusted
•Multi - services : delivered by a common QoS enabled core
network .
•Multi - access : diverse access networks ; fixed and mobile
terminals , ( Mobile , xDSL , etc )
•Not one network , but different networks that interoperate
seamlessly
•Mobility / Nomadicity of both users and devices
•“ My communications services ” Anywhere , any terminal or device ,
anytime
•This will leads to a true Next Generation Network ( NGN ) with greater
cost efficiency
and deliver Flexible Services for Industry Players / Operators

9
 Telco Industry Trends (2)

The Internet/Web is and will be the key

source of service and business
innovations
Internet §New players create very fast huge
Business communities offering cool services for
Models free
enter the §Revenue models based on advertising,
Telco subscription, and transaction
market §They expand scope and reach

Telco’s §Expand scope & reach:

looking §MNOs enter the fixed market
Telkomsel Beta Labs Innovation

for and vice versa

§Offer application services
new §Establish new business models (triple/quad play)
business

Some §Mobile device manufacturers enter the

new content and application arena
models … §Content providers offer connectivity
for free
New business models enter Telco market
10
 Telco Industry Trends (3)

In the future ..….

There Will be Service Explosion

Is this a Media Company or an Operator?

11
 Telco Industry Challenges ( 1 )

From Regulated Business to Unregulated Business

(B2B) Approach

12
 Telco Industry Challenges (2)

srotitepmoC
Internet Industry
weN gnicaF

Players TELCO 2 . 0 Players

NEW BUSINESS

Unregulated Players
Rapid development & implementation cycles ; Software and not
hardware based
ssenisuB weN dna
sledoM

Amazon, Yahoo, Google, Nokia, Microsoft, Cisco

SKYPE...Seeking revenue growth ...Exploring adjacent spaces
Through mobile internet Telecom
Operators
Under
Pressure
eunever detimiL

Increased competition ; Commoditization of network services ;

CORE BUSINESS

erusserp rednu

Increasing network &

Bandwidth costs ; long product development lifecycles

Mobile Fixed
htworg

Regulated Players Operators

Operators
TELCO 1 . 0
er eroc &

New Players in Emerging Market are Threathening TELCO Operatos

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 Telco Industry Challenges (3)

Data Service Explosion Require New Strategy

14
 Potential of Mobile Broadband

•Number of subscribers to mobile

broadband will overtake fixed
subscribers by 2011
•The mass market adoption of mobile
broadband will happen as a result of:
– Easy-to-use plug & play
devices,
– Advanced networks &
– Worry free data pricing
•Mobile broadband expands the
addressable market by:
– Support for high bandwidth
multimedia
applications
– Incorporating consumer
electronic
devices into the mobile
networks

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 Regulatory Issues to be Consider
-

Spectrum

Licensing Competition

Numbering Vertical Integration

Broadband Economy
InterconnectHorizontal Integration

Pricing RegulationService Regulation

Universal Access

Government Policies

The Key is Harmonization toward Unregulated Business

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 Addressing Innovative Regulations

1.Enhancing efforts to stimulate investment, innovation, and promotion

of next generation broadband deployment and demand for broadband
services.
2.Moving Step by step ,Telco Business from Regulated Industry to Self
Regulated Industry
3.Advocating for forward looking spectrum management, the allocation
of
additional spectrum for advanced wireless services on a
technology neutral basis 4. Creation of incentives to improve
Industry performance:
– price cap price regulation
– quality service targets, publicity, contracts
-Reduction of Regulatory Fee
- Tax Incentives
5. Universal Access and Service License to approach Broadband
Economy Main requirements and goals of Regulation and Public
Policy in a multi-service / service convergence environment

17
 Conclusions

1 . Broadband Infrastructure Development is the essential

Platform to support Broadband Economy and Broadband
Ecosystem must be built base on balancing Industry
Trends and Regulatory Policy to support Broadband
Economy .

2 . Industry Challenges and Trends will be shifting Telco

Industry from Regulated Industry to Unregulated Industry
step by step .
3.
4 . By addressing Innovative Regulation toward broadband
economy , Industry could be able to Stimulate Broadband
Economy through Network Capability and Capacity
Development in cost effective and efficient as well as
Flexibility of Services .
5.
6 . Potential of mobile broadband technology as enabler for
Broadband Economy come from Its improvement in
performance to improving User Experience
7.

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