By
: Jan van Rees, World Bank
Contents
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Current status
Main issues to be addressed:
 Broadband backbone
 Mobile/wireless Broadband
 Fixed Broadband
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Investments required
Role of Central Government
Recommended Regulation
Role of local Government
Role of Public works and PLN
Conclusions and proposed Time Schedule
Current status of Broadband in Indonesia
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In West-Indonesia the main fiber optic backbone between all provinces is in
place
Submarine routes to abroad are available and new routes are added
Broadband access still in early stage:
Technology
Fixed broadband
ADSL
Cable internet
FTTH
Wireless broadband
Mobile – 3G,
PC Based
Mobile – 3G,
Phone Based
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Number of Subscribers (latest
available data)
Providers
(1)
Telkom
First Media
More than 5
(4)
Telkomsel. Indosat, XL, also
some of the other 3G/UMTS
and CDMA EV/DO mobile
operators
Telkomsel. Indosat, XL, also
some of the other 3G/UMTS
and CDMA EV/DO mobile
operators
1,300,000
(2)
500,000
(3)
4,000
> 3.0 million
(5)
> 25 million
Mobile Internet/broadband shows rapid growth and is the main broadband
access for individual users
Market S
Not includ
different
service an
Regional comparison
Broadband Quality
Source : Global broadband quality study sponsored by Cisco
Main issues to be addressed
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Broadband backbone
 Inter province backbone in Sumatra-Java-KalimantanBali-South Sulawesi exists
 East Indonesia is missing (Palapa Ring East)
 Extension to many Kabupaten still to be implemented
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Mobile/wireless Broadband
 3G deployed on part of the network in 2100/1900 MHz
band, focused on cities
 WiMAX auctioned
 Requires cost-effective mobile broadband everywhere
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Fixed Broadband
 Monopoly on copper infrastructure ADSL (up to 1 Mb/s,
Speedy, PT Telkom)
 Monopoly on cable TV network
 Very limited Fiber To The Home
 Requires large scale fiber optic deployment
Backbone investments required
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Palapa Ring East: $ 186 million
Completing Palapa Ring East with Sorong-ManokwariBiak-Jayapura and Sorong-Fak-Fak- Timika-Merauke.
Estimated at $ 145 million
Extension to remaining Kabupaten SumatraKalimantan- South Sulawesi, 9.820 km, $ 113 million of
which $ 31 million is expected to be not feasible
commercially
Extension to Kabupaten in Eastern Indonesia. If
possible $ 225 million. However most non-coastal
Kabupaten in Papua lack any infrastructure to lay fiber
optic cable along (no roads, pipelines, etc.). Some
intermediate use of microwave might be required.
Total: $ 444 million + (part of) $ 225 million Kabupaten
extensions in Eastern Indonesia
Mobile/Wireless broadband access investments
required
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Passive infrastructure (towers and facilities) already
established
Upgrade of active radio network required (3G
everywhere, future upgrade to LTE)
Backhaul from towers to backbone
On the largest network about 5.000 out of 32.000
basestations are 3G. Current 3G spectrum is not cost
effective for rural roll-out (would require many more
towers). However if 850/900 MHz is used a simple
overlay can be deployed. Estimated costs: $ 500 –
1000 million
Backhaul is crucial. Could cost around the same
amount as the active infrastructure
Note: Short-term, activate EDGE feature everywhere
instead of only GPRS
CAPEX/OPEX impact
Source : GSA Information Paper UMTS 900 September 4th, 2008
Fixed broadband access investments required
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Future requirement is 100 Mb/s+, many countries are
deploying FTTH (like Singapore, Australia, etc.)
Main investment (50-80%) is passive infrastructure
The largest investment in the future telecom
infrastructure will be in the migration to fiber optic
access networks
Assuming $ 800/home then the replacement of current
copper network (8 million lines) would be in the order
of magnitude of $ 6400 million. Connecting up to 40
million homes would increase this to $ 32000 million
Smart and opportunistic deployment required to
reduce investment level
Note:
Short-term, deploy ADSL on all copper networks,
increase speed to technology limit (20 Mb/s) where
possible
Analysis
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The mobile (broadband) market is highly competitive.
Operators have made, and continue to make, multibillion $ investments each year
The number of mobile operators/networks is quite
high and consolidation should be anticipated. Fewer
mobile networks & more MVNO’s are a likely scenario.
Use of lower frequency bands (850/900 MHz) is critical
for cost-effective mobile broadband everywhere
Fixed broadband (ADSL) over copper wires, has been
more or less a monopoly business although cable
Internet is a competitor. Investments have been limited
A more competitive fixed broadband market is
required. This implies a transition from “monopoly” on
copper to “competition” on fiber.
Source : Point Topic Broadband by technology Q4 2008
Central Government role
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Timely issuance of permits and rights of way
Facilitate coordination between entities responsible
for different infrastructures for example ensuring that
construction of new roads, railways, power lines and
pipelines provides for co-location of fibre-optic cables.
Such practice is widespread around the world for new
infrastructure development
Financial incentives like a minimum subsidy for a
backbone extension to a marginal Kabupaten in return
for Open Access and early deployment (ICT fund)
Demand aggregation
Regulatory measures required (1)
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Infrastructure sharing.
 For towers this has already been done. This should be
extended to include other passive infrastructure like
ducts, poles, dark fibers, etc.
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Open access requirements:
 Passive infrastructure for essential and not easily
replicated infrastructure
 Active layer/service layer. IP level is open and net
neutrality should be maintained
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The transition from “monopoly” on copper to
“competition” on fiber implies that a fully “unified”
license is provided:
 Licensed operators can deliver all services (local, SLJJ,
SLI, Mobile, Internet, IPTV, etc.), typically over the
broadband access. Current legacy regulation focused on
individual services should be phased out
This is a prerequisite for a competitive fixed
broadband market.
Regulatory measures required (2)
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Equal access to buildings
 Remove all monopoly practices related to access to the
building and the in-building cable system.
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Allow non-Telco entities (construction companies, real
estate developers, local Government) to construct and
provide passive infrastructure. However mandate open
access
Number portability (mobile & fixed) for consumer
protection and additional competition
Mobile/wireless broadband
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Allow in-band migration to 3G/4G technologies
 Release more spectrum for the long-term (700 MHz,
2500 MHz).
 700 MHz requires an accelerated migration from
analogue to digital TV to free-up the Digital Dividend
 2500 MHz is currently mostly used for satellite TV
Regional/local Government role
What can be done to accelerate deployment?
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Timely issuance of permits and rights of way
Provide and prepare passive infrastructure whenever
constructing other infrastructure like roads.
Example:
Kabupaten without extension to the backbone and without
fiber infrastructure
 Invest in the passive infrastructure to lower the barrier
for entry. Stand-alone or as co-investor.
 Aggregate initial demand (schools, puskesmas,
Government offices) and tender this demand in return for
early service and deployment of open access backbone
and local fiber optic network
Public Works role
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By default Public works should incorporate the need
for ducts whenever constructing roads, etc.
Arrange a general agreement between Telco’s and the
Government with respect to the use of passive
infrastructure.
PLN role
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PLN is operating a very large passive infrastructure of
power lines and electricity access network on poles.
Fair and equal access to this passive infrastructure is
important to deploy cost-effectively.
Arrange a general agreement between Telco’s and PLN
with respect to the use of this passive infrastructure.
Conclusions (1)
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The future of telecom is Broadband (10+ Mb/s today and
100+ Mb/s tomorrow).
 Fixed broadband is essential to provide real high capacity
cost-effectively
 Mobile broadband can be deployed fast to provide initial
connectivity
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Main backbone (West+ East) and extension to all
Kabupaten in West Indonesia + South Sulawesi requires a
remaining investment of $ 444 million.
 Remaining (in particular non-coastal) Kabupaten in East
Indonesia Eastern Indonesia might require intermediate
solutions like microwave
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Transition from “monopoly” on copper to “competition” on
fiber through regulatory steps:
 Fully “Unified License” for all services and phase out of
legacy service by service regulation.
 Infratructure sharing
 Open access
Conclusions (2)
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Mobile broadband in the lower frequency bands (850/900
MHz) is critical for cost-effective rural deployment
Short-term fixes based on existing infrastructure:
 Deploy ADSL at all local PSTN switches. Where there is
copper there should be ADSL
 Activate the EDGE feature on the GSM network everywhere to
provide, almost instantly, better mobile internet all over
Indonesia
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Use demand aggregation and investments in passive
infrastructure to accelerate fiber optic roll-out of backbone
and access.
Consider use of the USO/ICT fund for those areas which
are commercially not feasible.
Local/regional Governments can play an important role to
realise broadband in their area. However it is important that
the Central Government arranges the regulatory
prerequisites to create a “competitive” fixed broadband
market.
Proposed time schedule
2009 Q4 2010 Q1 2010 Q2 2010 Q3 2010 Q4 2011
2012 2013-later
Short-term action to better use existing infrastructure
Roll-out of ADSL to all PSTN switches with terrestrial connectivity
Activate EDGE capability on every GSM basestation
Plan
Plan
Implement Implement Implement Implement
Implement Implement
Broadband backbone: Palapa Ring East
Palapa Ring East: Lombok - Kupang: Announced start end-Sept 2009
Palapa Ring East: Manado-Sorong-Ambon-Makassar: Expected start Dec 2009
Palapa Ring East: Sorong - Jayapura & Sorong - Merauke
Announced Implement Implement Implement Implement
Plan Implement Implement Implement Implement Implement
Plan
Plan
Implement Implement
Broadband backbone: Extension to remaining Kabupaten
Shared (passive) infrastructure is going hand-in-hand with broadband access in regions
Parallel with more broadband access deployment
Create a competitive broadband access market for Next Generation
Access (fiber optic based)
Duct/passive infrastructure sharing regulation
Plan
Plan Implement Implement Implement
Regulation to facilitate access to buidlings by multiple operators
Plan
Plan Implement Implement Implement
General arrangement between Government and Operators for access to passive infrastructure
Plan
Plan Implement Implement Implement
Unified acces license, one license to offer all telecom services. Any broadband provider should
also be able to offer telephony over broadband. Major reduction of current legacy PSTN
Plan
Plan Implement Implement Implement
oriented regulation
Remove any restrictions for VoIP over broadband
Plan
Plan Implement Implement Implement
Allow and support local initiatives to construct local open broadband access networks
Plan
Plan Implement Implement Implement
Aggregate early, initial, broadband demand (schools, health care centers, Government Offices)
Plan
Plan Implement Implement Implement Implement Implement Implement
and tender this. Initially current broadband followed by NGA broadband
Provide more E-Government services
Continuous ContinuousContinuous Continuous Continuous ContinuousContinuous Continuous
Accelerate mobile broadband also in rural areas
Allow mobile broadband (initially 3G, later LTE) in lower frequency bands 850 & 900 MHz
Facilitate in-band migration in general to allow more spectrum efficient technologies
Plan
Plan
Implement Implement Implement Implement
Implement Implement Implement Implement
Provide additional spectrum to support Mobile/Wireless Broadband
growth
Auction remaining part of 2.3 GHz band (currently called Mobile WiMAX, potentially also LTE)
Free up the 700 MHz band (Digital Dividend), currently expected 2018-2020, consider earlier
Free up the 2.5 GHz band for mobile/wireless broadband
Plan
Plan
Plan
Plan
Plan
Plan
Plan
Plan
Implement?
Plan
Plan
Plan
Plan
Plan
Plan
Plan
Customer protection (& facilitating competition)
Number portability for mobile & fixed numbers
Implement Implement Implement
Implement?
Implement?
Why are lower frequency bands so important?
 850 and 900 MHz bands offer a much better coverage
than 2100 MHz
 Many countries do have very extensive rural areas
which could benefit from 3G (mobile as well as in
“fixed” deployment) to deliver telephony and
broadband service
 Typically spectrum use in rural areas is less intensive
making it easier to allow in-band migration to 3G at
much lower cost
 Examples:
•
•
•
•
•
•
Telstra Next G network (850 MHz). Covers > 2.000.000 km2
Elisa Finland/Estonia (900 MHz)
Vodafone New Zealand (900 MHz), Australia under
construction
Optus in Australia (900 MHz)
AIS Thailand (900 MHz)
Europe is anticipated to accept UMTS 900 widely, many
trials/plans on-going
No of UMTS basestations required
 A lower frequency band results in a much more
cost efficient roll-out in rural areas. UMTS 900 is
already standardised.
Source : UMTS Forum presentation
Cell Coverage Comparison in typical urban case
Source : GSA Information Paper UMTS 900 September 4th, 2008
CAPEX/OPEX impact
Source : GSA Information Paper UMTS 900 September 4th, 2008
Example: Telstra HSDPA at 850 MHz
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 3GPP standard allows > 200 km. Telstra demonstrated 2 Mb/s even up
to 200 km for high elevation basestations and free of obstructions
Source : Telstra presentation at Mobile World Congress in Barcelona 2008
Co-existence issues
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UMTS 900  GSM 900 uncoordinated (2.8 MHz)
UMTS 900  GSM 900 co-located (2.6 MHz)
UMTS 900  GSM 900 micro/pico cells (> 2.8 MHz)
Suggested frequency arrangements:
Source : ECC Report 82