Economic Department
Embassy of Israel,
Singapore
Econo
Market Report
Indonesia Telecom Sector 2009 – 2010
Prepared by the Economic Department’s Indonesia Telecom Consultant
Economic Department
Embassy of Israel, Singapore
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Singapore 257964
Phone: (65) 68349220
Fax: (65) 67372502
www.israeltrade.gov.il/singapore
2
TABLE OF CONTENTS
Overview of Indonesia…………………………………………………………………. 4
Fact Sheet………………………………………………………………………………………………… 6
Risk Relating to Indonesia………………………………………………………………………. 6
Overview of Indonesia’s Telecom Industry……………………….……………. 11
Fixed Wireline and Fixed Wireless….…………………………………….………………… 11
Cellular………………………..…………………………………………………………………………… 11
Internet (Service Provider)…………….……………………………………................. 12
VoIP ………………………………………………………………………………………………………….13
Satellite …………………………………………………………………………………………………….13
Broadband Wireless Access (Wimax) ………………………………………………………13
Convergence …………………………………………………………………………………………….13
Other ………………………………………………………………………………………………………..14
Indonesia’s Telecom Policies and Regulations ………………..……………… 15
Overview ……………………………………….……………………………………................. 15
Telecommunication Law ………………………………………………………………………… 15
Competition ……………………………………………………………………………………………. 17
Indonesia Telecommunication Regulatory Body (ITRB) ………………………..17
Consumer Protection ……………………………………………………………………………… 18
Universal Service Obligation …………………………………………………………………..18
Implementing Regulation ………………………………………………………………………. 18
Fixed Line Operators – Key Players ……………………………….................
PT Telekomunikasi Indonesia, Tbk (TELKOM) ……………………………………….
PT Indosat, Tbk ………………………………………………………………………………………
PT Bakrie Telecom, Tbk ………………………………………………………………………….
21
21
26
31
GSM Operators – Key Players ………………………………………………………
PT Telekomunikasi Selular, Tbk (Telkomsel) ………………………………………..
PT Indosat (GSM Business Unit – Matrix and IM3) ……………………………….
PT XL Axiata, Tbk (XL) ……………………………………………………………………………
PT Hutchison CP Telecommunications (Three) ………………………………………
PT Natrindo Telepon Selular (Axis) …………………………………………………..
34
34
37
40
44
45
Fixed Wireless Access / CDMA 2000 1x Operators - Key Players ……… 48
PT Telekomunikasi Indonesia, Tbk (CDMA Business Unit – Flexi) ……….. 48
PT Mobile-8 Telecom (Fren/Hepi) ………………………………………………………….. 50
PT Bakrie Telecom (Esia) ………………………………………………………………………..53
PT Smart Telecom (Smart)………………………..………………………………………….. 57
PT Indosat, Tbk (CDMA Business Unit – StarOne) ………………………………… 58
PT Sampoerna Telekomunikasi Indonesia (Ceria) ……………………………….. 59
Internet Service Providers - Key Players ……………………………………….
PT Telekomunikasi Indonesia, Tbk (Multimedia Division – Speedy) …….
PT Indosat Mega Media (IM2) ………………………………………………………………..
PT Dyviacom Intrabumi, Tbk ………………………………………………………………….
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60
60
62
64
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PT Firstmedia, Tbk …………………………………………………………………………………. 66
PT Supra (Biznetworks) ………………………………………………………………….. 67
Broadband Wireless Access (Wimax) …………………..………………………..
BWA Regulation …………………………………..…………………………………………………
Tender and E-Auction Process for Frequency Alocation of 2,3 GHz ……..
Other Issues ……………………………………………………………………………………………
Local Content on BWA Equipment ………………………………………………………….
70
70
72
73
74
Indonesia’s Telecom Market ………………………………………………………..
Indonesia’s Telecom Market Trends ………………………………………………………
Partnership in Indonesia’s Telecom Industry ………………………………………..
Evaluation Processes in Indonesia’s Telecom Market ……………………………
75
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Disclaimer
This material should not be construed as an offer to sell or the solicitation of an offer to buy in any jurisdiction
where such an offer or solicitation would be illegal. We are not soliciting any action based on this material. It is for
the general information of Israeli business associates of Embassy of Israel in Singapore. It does not take into
account the particular investment objectives, financial situations, or needs of individual clients. Before acting on
any advice or recommendation in this material, clients should consider whether it is suitable for their particular
circumstances and, if necessary, seek professional advice. The information contained herein is believed to be
reliable, however, no representation, express or implied, is made with respect to the accuracy or completeness of
the information or as to any opinions set forth herein. Opinions expressed are our current opinions as of the date
appearing on this material only. We endeavour to update on a reasonable basis the information discussed in this
material, but regulatory, compliance, or other reasons may prevent us from doing so. The Embassy of Israel in
Singapore and/or any persons related thereto do not accept any liability whatsoever for direct or consequential
losses or damages that may arise from the use of information contained in this report. No part of this material may
be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Embassy of Israel
in Singapore’s prior written consen
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Fax: (65) 67372502
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4
OVERVIEW OF INDONESIA
Indonesia is one of the largest archipelagos in the world that has 17,508 islands, situated
between 6 degrees northern latitude and 11 degrees southern latitude and spreading from
97 degrees to 141 degrees eastern longitude and it is located between two continents – Asia
and Australia/Oceania. This strategic position greatly influences the country’s culture, social,
politics and economy.
Stretching along 3,977 miles between the Indian Ocean and the Pacific Ocean, Indonesia
has a total area of 1.9 million square miles including the ocean waters.
The five large islands of Indonesia are: Sumatera covering 473.606 square km, Java with
132.107 square km, Kalimantan (the third largest island in the world) with an area of
539.460 square km, Sulawesi with 189.216 square km, and Papua with an area of 421.981
square km.
The population of Indonesia can be divided into two major groups: in the Eastern region
most of the people are from the Malay ethnicity while in the eastern region there are the
Papuans originating from the Melanesian Islands. Indonesia also recognizes specific ethnic
groups that come from a certain province/area and have specific language for example the
Javanese from Central or East Java, the Sundanese from east Java or the Batak ethnicity
from North Sumatra.
In addition, there are also minority ethnicities derived from Chinese, Indian and Arabic
descendents. These people traveled as merchants through trade exchange since the 8th
century BC and migrated to Indonesia. Approximately 3% of the population is from Chinese
ethnicity, although the exact percentage is not known as the last ethnicity census was held
in the 1930s.
Islam is the major religion of 85.2% of the population, designating Indonesia as the largest
Moslem country in the world. The remaining population consists of Protestants (8.9%);
Catholics (3%); Hindus (1.8%); Buddhists (0.8%) and other religion (0.3%).
Many Indonesians speak their ethnic language as their mother tongue. However, the
Indonesian language (Bahasa Indonesia) is the official language and it is taught at all
schools and most Indonesians are proficient in using the language for communication.
As in other democratic countries, Indonesia applies the Trias Politica that recognizes the
separation of the legislative, executive and judicial bodies. The legislative authority is under
the People’s Consultative Assembly (MPR) that consists of two bodies namely the Parliament
composing of members of political parties and the Regional Representative Council (DPD)
composing of representatives from each province in Indonesia. Each province is
represented by 4 delegates that are elected by the people in the respective region.
The People’s Consultative Assembly (MPR) is the highest state institution. Upon the
Amendment of the 1945 Constitution, the membership of the MPR starting the period of
1999-2004, was amended to include not only the members of the parliament (DPR) but also
the members of the DPD. Formerly the MPR consisted of the parliament members and group
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representatives. Currently, the MPR has 550 members from the parliament and 128
members from the Regional Representative Council (DPD). The parliament members and
the DPD members are elected every five years. Since 2004, the MPR has become a bichamber parliament with the DPD as second chamber.
The executive institution is centralized under the president, vice president, and the cabinet
of ministers. The cabinet is a presidential cabinet in which the ministers report to the
president and do not represent the political parties.
The judicial institution -since the reform era and upon the amendment of the 1945
Constitution- is administered by the Supreme Court including the administration of the
judges.
Indonesia has 33 provinces (including 2 Special Territories of Nanggroe Aceh Darussalam
and Yogyakarta) and one Special Capital Region of Jakarta (DKI). East Timor was once part
of Indonesia, but then through a referendum in 1999, East Timor became the Democratic
Republic
of
Timor
Leste.
Provinces in Indonesia
Indonesia’s cultural art is greatly influenced by other cultures, such as the Hindu mythology
and culture that is reflected in the Javanese and Balinese dances.
Many of the dances also reflect some Islamic values. Several of these dances originate from
the island of Sumatra, such as the Saman Meusukat dance and the Seudati dance from
Nanggroe Aceh Darussalam.
Another famous cultural item from Indonesia is the wayang kulit (shadow puppet made
from goat skin) that depicts mythological characters and stories. The art of old poetry in the
form of quatrain and couplet sayings from various regions such as the Malay quatrain are
often cited in special occasions or in cultural performances.
One of Indonesia’s cultural heritage that has been acknowledged as a world heritage is the
batik cloth. The prominent batik industry areas are in Yogyakarta, Solo, and also
Pekalongan.
Pencak silat is an art of self defense which is uniquely from Indonesia. This martial art is
sometimes shown at certain performances accompanied by traditional music of the region.
In the field of music, Indonesia is rich with traditional as EAll as modern music that extends
from the city of Sabang (the EAstern point of Indonesia) to the city of Merauke (the eastern
point of Indonesia). Although traditional music including Javanese keroncong is commonly
known, modern music is more popular folloEAd by dangdut music. Dangdut is one type of
music originating from Indonesia that has also become quite popular throughout the
country. This type of music is a blend of Malay and Indian music with elements from
traditional music as well. The name of “Dangdut “ is derived from the sounds of “dang” and
“dut” (pronounced as “doot”) that come from the dominating resonances of the bongo and
the flute. The Dangdut singers usually sing while dancing expressively and gracefully
following the beat of the music. There are several varieties of Dangdut music namely Malay
Dangdut, Modern Dangdut (using modern instruments) and Coastal Dangdut (influenced by
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Javanese and Sundanese traditional music). In the 1970s, Dangdut was initially recognized
as a type of Malay orchestral music, but in the 1980s, this type of music became more
popularly known as Dangdut music.
The people of Indonesia consist of various ethnic groups, religions and faith. The various
ethnic groups are for example Batak, Karo, Minangkabau, Malay in Sumatra and so forth.
Indonesia acknowledges several religions namely Islam, Christianity, Catholicism, Hinduism
and Buddhism and the Konghucu faith, but the majority of the population are Moslems.
Fact Sheet
Although faced with the impact of the global financial crisis, the Indonesian economy will be
able to chart 5% growth in 2009. This prediction is based on an evaluation of Indonesia’s
economic performance during the past five years and the budget outcome for the recently
completed 2008 fiscal year. The 2008 budget deficit at only 0.1% of GDP, well below the
originally planned 2.1% of GDP, affords the Government greater headroom for
implementing pro-growth, pro-job and pro-poor programmes. The Rp 52.3 trillion unused
portion of budget expenditures in 2008 is a blessing in disguise in the current global
financial crisis, as the Government is able to appropriate part of this money to promoting
economic growth amid the present global slowdown.
Progress by Asian Countries since 1997/1998 Economic Crisis (% or % of GDP for
External Debt)
Economic Growth
Inflation
1997- 2005- 2008
1998
2008
04
07
Indonesia
1.5
5.8
6.2
58.4
11.0
Thailand
5.0
5.0
4.5
8.1
3.0
Malaysia
5.6
6.0
5.7
5.2
4.3
Philippines 5.9
4.8
2.7
9.3
4.5
South Korea 6.1
5.0
4.1
7.7
3.0
Sources: IMF, International Financial Statistics
External Debt
2002
2008
Unemployment
2000
2008
64.9
48.8
48.4
69.8
25.8
8.3
2.4
3.5
11.2
4.4
30.7
29.9
31.3
45.4
39.4
8.3
1.4
3.3
7.3
3.5
RISKS RELATING TO INDONESIA
CURRENT POLITICAL AND SOCIAL EVENTS IN INDONESIA MAY ADVERSELY
IMPACT BUSINESS ACTIVITY IN INDONESIA
Since the resignation of President Soeharto in 1998, Indonesia has experienced a process of
democratic change, resulting in political and social events that have highlighted the
unpredictable nature of Indonesia’s changing political landscape. These events have resulted
in political instability, as well as general social and civil unrest on certain occasions in the
past few years.
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For example, since 2000, thousands of Indonesians have participated in demonstrations in
Jakarta and other Indonesian cities both for and against the Government, as well as in
response to specific issues, including fuel subsidy reductions, privatization of state assets,
anti-corruption measures, decentralization and provincial autonomy, actions of former
Government officials and their family members, the American-led military campaigns in
Afghanistan and Iraq and potential increases in electricity tariffs. Althoughthese
demonstrations were generally peaceful, some have turned violent. In particular, on several
occasions since June 2001, the Government has mandated increases in the prices of certain
essentials such as fuel, which has in turn sparked nationwide demonstrations and strikes.
There can be no assurance that future sources of popular discontent will not lead to further
political and social instability.
Separatist movements and clashes between religious and ethnic groups have resulted in
social and civil unrest in parts of Indonesia. In the province of Papua (formerly Irian Jaya),
there have been clashes between supporters of those separatist movements and the
Indonesian military. In Papua, violent actions against Freeport’s gold mining operations
have recently caused loss of life of the Indonesian military, police and civilians. In Maluku
and Poso, a district in the province of Central Sulawesi, clashes between religious groups
have resulted in casualties and displaced persons.
In 1999, Indonesia successfully conducted its first free elections for parliament and
president. In 2004, Indonesians directly elected the President, the Vice-President and
representatives of the Indonesian parliament through a proportional voting system with an
open list of candidates for the first time. At the local governmental level, Indonesians have
started to directly elect their respective heads of local governments. On April 9, 2009,
elections were held to elect the representatives in the Indonesian Parliament (including
national, regional and local representatives). The July 2009 presidential elections resulted in
the re-election of President Susilo Bambang Yudhoyono. Although the April 2009 and July
2009 elections were conducted in a peaceful manner, political campaigns in Indonesia may
bring a degree of political and social uncertainty to Indonesia. Political and related social
developments in Indonesia have been unpredictable in the past, and there can be no
assurance that social and civil disturbances will not occur in the future and on a wider scale,
or that any such disturbances will not, directly or indirectly, materially and adversely affect
our businesses, financial conditions, results of operations and prospects. With a new
cabinet and new legislators, it is also possible that there may be changes that could impact
on telecommunications regulations, tariffs and other factors, which in turn could influence
our business prospects, competition and the scope to offer new products or continue to offer
existing ones.
NEGATIVE CHANGES IN GLOBAL, REGIONAL OR
ACTIVITY COULD ADVERSELY AFFECT OUR BUSINESS
INDONESIAN
ECONOMIC
Telecom Business performance is significantly dependent on the health of the Indonesian
economy as substantially all of the operations, assets and customers are located in
Indonesia.
The economic crisis which affected South East Asia, including Indonesia, from mid-1997 was
characterized in Indonesia by, among other effects, currency depreciation, negative
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economic growth, high interest rates, social unrest and extraordinary political
developments. These conditions had a material adverse effect on Indonesian businesses.
The economic crisis resulted in the failure of many Indonesian companies, through inability
or otherwise, to repay their debts when due.
The Indonesian financial markets and the Indonesian economy are also influenced by
economic and market conditions in other countries. The global financial crisis that arose in
part out of the subprime mortgage crisis in the US in 2008 led to sharp declines in equity
and commodities markets worldwide including in Indonesia. The world economic downturn
hashad a significant adverse impact on the Indonesian economy as well as the stability of
the Indonesian and regional financial markets.
Adverse economic conditions could result in less business activity, less disposable income
available to consumers to spend and reduced consumer purchasing power, which may
reduce demand for communication services, including the services, which in turn would
have an adverse effect on the business, financial condition, results of operations and
prospects. There can be no assurance that the recent improvements in economic conditions
globally and in the region will continue or that adverse economic conditions will not reoccur.
FLUCTUATIONS IN THE VALUE OF THE RUPIAH MAY MATERIALLY AND ADVERSELY
AFFECT OUR FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Most Telecom Business Players functional currency is the Indonesian Rupiah. One of the
most important immediate causes of the Asian economic crisis and affected Indonesia was
the depreciation and volatility of the value of the Rupiah as measured against other
currencies, such as the US Dollar. Although the Rupiah has appreciated considerably from
its low point of approximately Rp15,250 per US Dollar in July 1998, the Rupiah has
experienced, and may in the future experience again, significant volatility.
A substantial proportion of the revenues are denominated in Rupiah. A depreciation of the
Rupiah against the US Dollar or other foreign currency could have an adverse impact on
Telecom Players. Among other things, it could increase the cost of purchasing equipment,
result in exchange rate losses from foreign currency payment obligations, increase the
foreign currency-denominated debt in Rupiah terms, and reduce the US Dollar amounts of
dividends received by shareholders or ADS holders.
There are no assurances that the Rupiah will not be subject to depreciation and continued
volatility, that the current exchange rate policy will remain the same, or that the
Government will, or will be able to, act when necessary to stabilize, maintain or increase the
value of the Rupiah, and will not act to devalue the Rupiah, or that any such action, if
taken, will be successful. Telecom players also cannot assure you that they will be able to
manage the exchange rate risk successfully in the future or that they will not be adversely
affected by the exposure to exchange rate risk.
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ANY DOWNGRADE IN INDONESIA’S SOVEREIGN DEBT RATING BY INTERNATIONAL
RATING AGENCIES WOULD ADVERSELY AFFECT LIQUIDITY IN THE INDONESIAN
FINANCIAL MARKETS AND THE ABILITY OR COST OF INDONESIAN COMPANIES TO
RAISE FUNDING
As of this date of the Annual Report, the Government’s long-term foreign currency debt was
rated “BB+” by Fitch Ratings and “BB-” by Standard & Poor’s. These ratings reflect an
assessment of the Government’s overall ability to pay its obligations and its willingness to
meet its financial commitments. There is no guarantee that such ratings will not be
downgraded in future. In addition, the global financial crisis has prompted review of the
regulation of credit rating agencies in the United States and elsewhere. Different, or stricter,
regulation of credit rating agencies may result in a change to, including a downgrade of, the
ratings. Any such downgrade would have an adverse impact on liquidity in the Indonesian
financial markets and the ability of Indonesian companies to raise funding, at a manageable
interest rate.
TERRORIST ACTIVITIES IN INDONESIA COULD DESTABILIZE INDONESIA WHICH
WOULD ADVERSELY AFFECT INDONESIA BUSINESS, FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Since 2002, several bombing incidents with fatalities and injuries have taken place in
Indonesia. These include, the JW Marriot Hotel and Ritz Carlton Hotel in July 2009, in Bali in
October 2002 and October 2005, at the JW Marriott Hotel in Jakarta in August 2003, the
Australian Embassy in Jakarta in September 2004 and the eastern Indonesian town of
Tentena on the island of Sulawesi in May 2005. Further terrorist acts may occur in the
future. Terrorist acts could destabilize Indonesia and increase internal divisions within the
Government as it evaluates responses to that instability and unrest. Violent acts arising
from, and leading to, instability and unrest have in the past had, and may continue to have,
a material adverse effect on investment and confidence in, and the performance of the
Indonesian economy, which would have a material adverse effect on our business, financial
condition, results of operations, prospects and the market price.
INDONESIA IS VULNERABLE TO NATURAL DISASTERS AND EVENTS BEYOND OUR
CONTROL, WHICH COULD ADVERSELY AFFECT OUR BUSINESS AND OPERATING
RESULTS
Many parts of Indonesia are prone to natural disasters such as floods, lightning strikes,
cyclones, earthquakes, tsunamis, volcanic eruptions, fires or other occurrences. The
Indonesian archipelago is one of the most volcanically active regions in the world as it is
located in the convergence zone of three major lithospheric plates,. It is subject to
significant seismic activity that can lead to destructive earthquakes, tsunamis or tidal
waves. From time to time, there have natural disasters that have killed, affected or
displaced large numbers of people and damaged our equipment. These events have in the
past, and may in the future, disrupt our business activities, cause damage to equipment and
adversely affect the financial performance and operating income.
On August 16, 2009, Padang and its surrounding area experienced an earthquake. On
September 2, 2009 an earthquake struck part of West Java. The disaster caused damage to
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some assets. On September 30, 2009 there was an earthquake in West Sumatra, which
disrupted the provision of telecommunications services in several locations.
Although they have implemented a business continuity plan and a disaster recovery plan,
and they have insured the assets to protect from any losses attributable to natural disasters
or other phenomena beyond the control, there is no assurance that the insurance cover will
be sufficient to cover the potential losses, that the premium payable for these insurance
policies upon renewal will not increase substantially in the future, or that natural disasters
would not significantly disrupt the operations. In addition, a significant earthquake, other
geological disturbance or weather-related naturaldisaster in a major Indonesia city could
severely disrupt the Indonesian economy and undermine investor confidence. Any of these
events could materially and adversely affect the business, financial condition, results of
operations and prospects.
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OVERVIEW OF INDONESIA’S TELECOM INDUSTRY
Fixed Wireline and Fixed Wireless
Historically, Telkom had the exclusive right to provide fixed line domestic
telecommunications services in Indonesia. Pursuant to regulations introduced to implement
the Telecommunications Law, the Government terminated Telkom’s monopoly in providing
fixed line domestic telecommunications services. The MoC issued Indosat a license to
provide local telephone services from August 2002. In May 2004, Indosat received its
commercial license to provide domestic long-distance telephone services. Indosat launched
its CDMA fixed wireless access service under the brand name “StarOne” in Surabaya.
In May 2004, and in Jakarta in July 2004, thereby creating a “duopoly system” in
Indonesian fixed line domestic telecommunications market. From January 2006, Indosat
was able to provide nationwide DLD services through its CDMA-based fixed wireless
network, its own fixed line network and its interconnection arrangements with us. Based on
the interconnection agreement between us and Indosat dated September 23, 2005, we
agreed to open interconnection with Indosat’s local fixed line service in certain areas such
as Jakarta, Surabaya, Batam, Medan, Balikpapan and Denpasar. To date, Indosat has
expanded the coverage of its local fixed network to major areas in Sumatra, Java, Bali,
Kalimantan and Sulawesi. Indosat also commenced offering limited domestic long-distance
services for calls within its network in late 2004.
At the end of 2008, PT Bakrie Telecom got license for IDD and DLD Infrastructure Network
and services. At current date, Telkom and Indosat fixed line services right now faces direct
and indirect competition from other fixed wireline and fixed wireless service providers, such
as PT Bakrie Telecom (formerly Ratelindo) and PT Batam Bintan Telecom, mobile cellular
services, short messaging service (“SMS”), Voice over Internet Protocol (“VoIP”) services
and E-mail. In the near future, Wimax will be start to be implemented at the end of year
2010.
Cellular
As of the date of this report, the cellular market in Indonesia is dominated by Telkomsel,
Indosat and XL Axiata. These three nationwide cellular operators collectively had around
88.0% of the Indonesian cellular market (full mobility). The number of full-mobility cellular
subscribers in Indonesia totaled approximately 138.8 million at the end of 2008 and
approximately 166.9 million at the end of 2009, representing an annual growth rate of
approximately 20.2% during that period. Despite this, the cellular penetration rate in
Indonesia, at approximately 72% at the end of 2009, has remained relatively low compared
to many other countries. During recent years, competition among cellular operators has
intensified.
GSM mobile cellular operators compete principally on the basis of pricing, brand, network
coverage, network quality, distribution, technology, value-added services and service
quality. We believe that Telkomsel is able to compete effectively in the Indonesian cellular
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market due to the high network quality and coverage of its mobile cellular network and the
strength of its brand name.
As of December 31, 2009, Telkomsel remained the largest national licensed provider of
cellular services in Indonesia, with approximately 81.6 million cellular subscribers and a
market share of 49% of the full-mobility cellular market. The second and the third largest
providers were Indosat and XL Axiata, which have a market share of 20% and 19%,
respectively, based on the estimated number of subscribers as of December 31, 2009. In
addition to the nationwide GSM operators, a number of smaller regional GSM, analog and
CDMA cellular providers operate in Indonesia bringing the total number of operators to over
10.
The following table sets out summary information as of December 31, 2009 on each of the
three leading nationwide licensed GSM mobile cellular operators:
Internet (Service Providers)
Indonesia marks a decade of the technological growth in the country with astonishing achievement
especially when it is concerned of the rapid usage of the internet.
According to the report put through by the Internetworldstats (IWS), as quote on January 11, 2010, the
internet users in Indonesia during the year 2000 were figured to reach 2 million, and increased to 30
million by the end of 2009.
It proves that the number of internet users in the country during the period has inflated by 1,150
percent. Given the total estimated population of the country of 240.2 million as per September 30,
2009, the internet has penetrated to 12.5 percent of the population.
Compared to total internet users in Asia, Indonesia outgrows 4.1 percent. The IWS noted that internet
users in Asia reach 738 million, a growth of 545.9 percent than the year 2000.
Indonesia for the time being is considered Asia's fifth top country on the growth of internet users behind
China (338 million), Japan (94 million), India (81 million), and South Korea (37.5 million).
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VoIP
VoIP (Voice over Internet Protocol) uses data communications to transfer voice traffic over
the internet, which usually provides substantial cost savings to subscribers. Besides Telkom,
XL Axiata, Indosat, Atlasat, Gaharu, PT Satria Widya Prima, Primedia Armoekadata and
Jasnita Telekomindo provide VoIP services in Indonesia. Other unlicensed operators also
provide VoIP services that may be accessed through the internet as well as from software
that allows PC-to-PC voice communications through the internet. VoIP operators offering
international services also compete with IDD operators, such as Telkom, Indosat and Bakrie
Telecom.
VoIP operators compete primarily on the basis of pricing and service quality. Certain VoIP
operators have started offering services such as budget calls and prepaid calling cards,
which are expected to result in greater competition among VoIP operators and other IDD
service providers.
Satellite
In recent years, competition in the Asia-Pacific satellite business has become more intense.
Companies in this business compete primarily on coverage power, product offerings and
price. The Indonesian satellite industry is not strictly regulated and in practice operates in
accordance with an “open-sky” policy. This means that Indonesian satellite operators must
compete with foreign satellite operators.
Broadband Wireless Access (WIMAX)
After deciding on the 2.3 GHz and 3.3Ghz frequency for BWA services, on July 16, 2009 the
Government concluded the tender for wireless broadband access in the 2.3 GHz frequency
by dividing Indonesia into 15 zones. Telkom obtained licenses for five of these zones. The
other seven licensed wireless broadband access operators were Indosat Mega Media,
Internux, First Media, Jasnita Telekomindo, Berca Hardayaperkasa, the Rahajasa Media
Internet and Wimax Indonesia Consortium, the Comtronics Systems and Adiwarta Perdania
Consortium. As Telkom had previously been licensed for the 3.3 GHz frequency in seven
zones, we are now licensed to operate wireless broadband access services in a total of 12
zones.
Convergence
On September 9, 2009, Telkomsel and Indonusa, were appointed to carry out the field
testing of digital mobile TV by government. The results will be used as a foundation in the
formation of mobile TV regulations. It will be expected that this will be the first step in
acquiring a license to be a mobile TV operator.
In August 2009, MOCI issued a Ministerial Decree No.30/PER/M.KOMINFO/8/2009 on the
Undertaking of Internet Protocol Television (IPTV) Services in Indonesia, which regulate
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Telkom’s planned IPTV business, which is a subscription-based TV service transmitted
through internet-protocol network.
As defined in the Decree, IPTV is a technology which provides convergence services in the
form of radio and TV broadcasting, video, audio, text, graphic and data channeled through
internet protocol connections which quality, service , security and reliability can be
guaranteed, and are capable of providing communication services with users in an
interactive and real time manner on standard television. Telkom has prepared the required
infrastructure to support the IPTV services that make available the multimedia access
(services of interactivity, internet and video in 1 access to customers). Telkom believe that
IPTV will increase the value-add of our existing wired network infrastructure (Wireline, Fiber
Optic) which extends to 8.7 million lines throughout Indonesia.
Other operator such Indosat, XL, Bakrie, etc, also waiting to implement and gaining the
license from government for IPTV.
Other
In the last three years, competition in multimedia, internet, and data communications
related services has become more intense due to the issuance of new licenses as a result of
the deregulation of the Indonesian telecommunications industry. We expect competition will
continue to become more intense. Multimedia, internet and data communications-related
service providers in Indonesia compete principally on the basis of price, range of services
provided, network quality, network coverage and customer service quality.
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INDONESIA’S
TELECOMMUNICATION
AND REGULATIONS
POLICIES
Overview
The framework for the telecommunications industry is comprised of specific laws,
government regulations and ministerial decrees enacted and issued from time to time. The
current telecommunications policy was first formulated and articulated in the Government’s
“Blueprint of the Indonesian Government’s policy on Telecommunications,” contained in
Ministry of Communications (“MoC”) Decree No. KM 72 of 1999 dated July 20, 1999. This
was intended to:
 increase the sector’s performance in the era of globalization;
 liberalize the sector with a competitive structure by removing monopolistic controls;
 increase transparency and predictability of the regulatory framework;
 create opportunities for national telecommunications operators to form strategic
alliances with foreign partners;
 create business opportunities for small and medium enterprises; and
 facilitate new job opportunities.
Current telecommunications law is embodied in Law No. 36/1999 (“Telecommunications
Law”), which became effective on September 8, 2000.
Telecommunications Law
The Telecommunications Law sets guidelines for industry reforms, including industry
liberalization, facilitation of new entrants and enhanced transparency and competition. The
Telecommunication Law establishes substantive principles. Detailed provisions implementing
the Telecommunications Law are provided in the regulations, ministerial decrees and
decrees of the DGPT.
The Telecommunications Law eliminated the concept of “organizing entities,” ending
TELKOM’s and Indosat’s status as organizing entities with responsibility for coordinating
domestic and international telecommunications services, respectively, for the industry. To
enhance competition, the Telecommunications Law prohibits monopolistic practices and
unfair competition among telecommunications operators.
The Government is an impartial policy maker and supervisor of the telecommunications
sector. To ensure transparency in the regulatory process under the Telecommunications
Law, an independent regulatory body was established in July 2003 to regulate, monitor and
control the telecommunication industry. The Indonesian Telecommunications and Regulatory
Body (“ITRB”)
comprises officials from the DGPT and the Committee of Telecommunication Regulations
and is headed by the Director General of Post and Telecommunication Services. MoC Decree
No. 67/2003 stipulated the relationship between the MoC, from which telecommunications
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regulatory responsibility was transferred to the MoCI in February 2005, and the ITRB. As
part of its regulatory function, the ITRB is authorized to
 carry out the selection or evaluation for licensing of telecommunications networks
and services in accordance with the MoCI’s policy, and
 propose to the MoCI about the operation performance standards for
telecommunications
networks
and
services,
service
quality
standards,
interconnection charges and equipment standardization.
As part of its monitoring function, the ITRB is authorized to monitor and is required to
report to the MoCI on
 the implementation of the operation performance standards for telecommunications
networks and services,
 the competition among network and service operators, and
 compliance with the utilization of telecommunication equipment in accordance to the
applicable standards.
As part of its controlling function, the ITRB is also authorized to control and required to
report to the MoCI regarding
 the facilitation of any dispute resolution among network and service operators, and
 the control of the use of telecommunications equipment and implementation of
service quality standards.
Decisions of the ITRB are in the form of a DGPT decree.
The Telecommunications Law organizes telecommunications providers into three categories:
1. Telecommunications Network Providers
2. Telecommunications Service Providers, and
3. Special Telecommunications Providers
Licenses are required for each category of telecommunications service. A
telecommunications network provider is licensed to own and/or operate a
telecommunications network. A telecommunications service provider is licensed to provide
services by leasing network capacity from other network providers. Special
telecommunications licenses are required for providers of private telecommunications
services for purposes relating to broadcasting and national security interests. MoCI
Regulation No. 01/PER/M.KOMINFO/01/2010 dated January 25, 2010 regarding the
Operation of Telecommunication Network and MoC Decree No. KM 21/2001 dated May 31,
2001 regarding the Operation of Telecommunication Services (as amended by Decree No.
KM 30/2004 dated March 11, 2004, MoCI Regulation No.07/P/M.KOMINFO/04/2008 dated
April 4, 2008 and MoCI Regulation No.31/PER/M.KOMINFO/09/2008 dated September 9,
2008) implement the provisions of the Telecommunications Law regarding these new
categories of telecommunications network and services operations.
Digital technology is developing rapidly, and increasingly in the direction of convergence, or
the integration of telecommunications, data, information and broadcasting services. This
has given rise to the issuance of a number of regulations that specifically bring several
aspects of those fields together:
 Law No. 11 of 2008 dated April 21, 2008 concerning Electronic Information and
Transactions (“Law No.11/2008”) regulates the means by which TELKOM may
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
operate and expand its business in information and electronic transactions, including
e-payment. Regulations to implement this law have not yet been brought into force.
Ministerial Decree No.30/PER/M/KOMINFO/8/2009 regarding IPTV (Internet Protocolbased TV) provides the regulatory platform for TELKOM to deliver its new IPTV, Net
TV and Web TV services, in the interests of creating value-add for existing wireline
infrastructure.
Competition
Despite the termination of exclusivity rights, the Government does not prohibit or
discourage operators from attaining a dominant position with regard to the
telecommunications services. The Government, however, does prohibit operators from
abusing a dominant position. In March 2004, the MoC issued Decree No. 33/2004 (adopted
pursuant to Law No. 5/1999, preventing monopolies and unfair competition), which sets
forth measures to prohibit the abuse of their dominant position by network and service
providers. Dominant providers are determined based on factors such as scope of business,
coverage area of services and whether one controls a particular market. Specifically, the
Decree prohibits a dominant provider from engaging in practices such as dumping,
predatory pricing, cross-subsidies, compelling consumers to use such provider’s services (to
the exclusion of competitors) and hampering mandatory interconnection (including
discrimination against specific providers).
The recent enactment of KPPU Regulation No. 1/2009 on Pre-Notification of Mergers,
Consolidations, and Acquisitions, along with its Implementing Guidelines is expected to
provide further legal certainty in the business environment in Indonesia, especially for those
intending to enter into M&A transactions. It is intended to control anti-competitive M&A
activity. For that purpose, KPPU engages “pre-notification” and “post-notification” to KPPU.
The former is voluntary and can be filed prior to the merger, while the latter is compulsory
and must be filed after the merger.
KPPU also has the authority to supervise foreign transactions that may have an unfavorable
effect on the Indonesian market, as governed under Law 5/1999. This covers (a) mergers of
foreign companies, one of which operates in Indonesia, (b) mergers between foreign and
domestic companies (whether or not operating in Indonesia), or (c) any other form of
merger that has a foreign nature.
Indonesian Telecommunications Regulatory Body (“ITRB”)
The ITRB was established in 2003 as the implementation agency of the Telecommunications
Law. The ITRB is authorized to regulate, monitor and control the operations of the
telecommunications sector. The ITRB consists of officials from the DGPT and the Committee
of Telecommunication Regulations. The establishment of such an independent regulatory
body is intended to reduce the Government’s role in the telecommunications industry from
that of being the telecommunications industry’s financier, operator, regulator and licenser to
become primarily the industry’s licenser and regulator.
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The Telecommunication Traffic Clearing System (“TTCS”), also established in 2003, assists
the ITRB in the performance of its functions and is responsible for all interconnection
matters. ITRB, through the TTCS, will obtain data about the profile of interconnection traffic
among operators to ensure transparency in the charging of interconnection fees.
In 2009, the MoCI issued Decree No.14/PER/M.KOMINFO/02/2009 dated February 25, 2009
regarding Telecommunication Traffic Clearing which regulates the transfer of the operation
of the TTCS to the operators. The Government acts as a supervisor, while the operators are
responsible for the system and operation. The TTCS performs as a tool for the government
to maintain a check and balance mechanism for verifying operator traffic clearing data. The
data is used as reference for the Government in regulating the telecommunication industry.
Consumer Protection
Under the Telecommunications Law, each operator must provide guarantees for consumer
protection in relation to quality of services, usage or service fees, compensation and other
matters. Customers injured or damaged by negligent operations may file claims against
negligent providers. With the many advancements in telecommunication services, operators
has to pay special attention to its service quality.
Regulations in respect of Telecommunication Consumer Protection provide a regime for
standard qualities of telecommunication network for telecommunication operators. This is to
ensure that the telecommunication network services provided by such operators to
consumers are in accordance with the requisite standards.
Universal Service Obligations
All telecommunications network operators and service providers are bound by a USO that
requires them to contribute toward providing universal telecommunication facilities and
infrastructure or other forms of compensation. USO amounts we paid are as follows: Rp
383.8 billion for fiscal year 2006; Rp 438.5 billion for fiscal year 2007; and Rp 462.5 billion
for fiscal year 2008; and Rp 809.6 billion for fiscal year 2009.
Implementing Regulations
The Government has issued several implementing decrees and regulations relating to the
Telecommunications Law and other laws. The table on page 40 identifies each and
illustrates the licenses that we hold, the products that we offer and the laws, regulations
and decrees that provide for each. The licenses that we hold include type of arrangement
(Network, Service and Exclusive Telecommunications), service agreement, fundamental
technical plan, standardized hardware, standard service and network quality, resource
usage allocation (numbering and spectrum frequency), interconnection, basic rate and joint
facilities (towers).
Regulations issued since January 2009 include the following:
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
Four regulations issued on January 19, 2009, relating to the arrangement and use of
radio frequencies for wireless broadband services and the preparations for the
operators granted operations on the 2.3 GHz frequency, as follows:
o MoCI
Decree
No.04/KEP/M.KOMINFO/01/2009
regarding
Business
Opportunities to Implement a Fixed Local Network on Switched Packets on
2.3 GHz Radio Band Frequency for the needs of Wireless Broadband, as
amended by MoCI Decree No.114/KEP/M.KOMINFO/4/2009 dated April 17,
2009;
o MoCI Decree No.05/KEP/M.KOMINFO/01/2009 regarding the Block Stipulation
of Radio Band Frequency and Wireless Broadband Zone on 3.3 GHz Radio
Band Frequency for Existing Radio Band Frequency Users for the needs of
Wireless Broadband;
o MoCI Regulation No.08/PER/M.KOMINFO/01/2009 regarding the Stipulation of
Radio Band Frequency for the needs of Wireless Broadband on 2.3 GHz Radio
Band Frequency; and
o MoCI Regulation No.09/PER/M.KOMINFO/1/2009 regarding the Stipulation of
Radio Band Frequency for the needs of Wireless Broadband on 3.3 GHz Radio
Band Frequency and the Migration of Existing Radio Frequency Users for the
needs of Wireless Broadband from 3.4-3.6 GHz to 3.3 GHz Radio Band
Frequencies,
as
amended
by
MoCI
Regulation
No.35/PER/M.KOMINFO/08/2009 dated August 31, 2009;

On January 16, 2009, the Government issued Government Regulation No.7/2009
regarding Type and Tariff for Non-Tax State Revenue that apply to the Department
of Communication and Information. The key points in this regulation are as follows:
o The applicable types of non-tax state revenue are not only those from post
and telecommunications operators but also those from broadcasting
operations, facilities and infrastructure leasing services and education and
training services;
o The
BHP
(“Biaya
Hak
Penyelenggaraan”
or
usage
right
fee)
fortelecommunications services is reduced from 1% to 0.5% of gross
revenue; and
o Administrative sanctions and fines are imposed for violations of the fulfillment
of service obligations and quality;

On February 25, 2009, MoCI issued Decree No.14/PER/M.KOMINFO/02/2009
regarding Telecommunication Traffic Clearing System (SKTT). This regulation
provides that the operators will be responsible for the system and operation of the
Telecommunication Traffic Clearing System, which was previously operated by PT
Pratama Jaringan Nusantara (“PJN”), a private entity selected by the MoC. Pursuant
to the regulation, PJN will manage the day to day operations of the system, but in a
subsidiary role. In addition, PJN cannot continue to use its own system but was
required to use SOKI, the interconnection traffic clearing system belonging to the
Telecommunication Interconnection Clearing Association (ASKITEL);

On March 30, 2009, a Joint Regulation of the Minister of Home Affairs No.18/2009,
the
Minister
of
Public
Works
No.07/PRT/M/2009,
MoCI
No.19/PER.M.KOMINFO/03/2009, and the Head of the Investment Coordinating
Economic Department
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Board No.3/P/2009 was issued regarding Guidelines on the Joint Development and
Operation of Telecommunications Tower.
Essentially, this regulation governs the following matters:
 The requirement for tower providers to apply to the Regent/Mayor for a
license to erect a tower;
 The requirement that the license to erect a tower must be processed within
14 days of the technical plan being approved;
 The classification of tower providers into telecommunication operator tower
providers and non-telecommunication operator tower providers;
 The restricted zones where tower construction is prohibited;
 The regulation of tower construction and the payment of contributions; and
 The prioritization of the joint use of existing towers;

MoCI Regulation No.27/PER/M.KOMINFO/8/2009 dated August 5, 2009 regarding
Field Trials of Digital Television;

MoCI Regulation No.30/ PER/M.KOMINFO/8/2009 dated August 19, 2009 regarding
the Undertaking of Internet Protocol Television — IPTV Services in Indonesia;

MoCI Regulation No.39/PER/M.KOMINFO/10/2009 dated October 16, 2009 regarding
Basic Framework for the Provision of Free to Air Terrestrial Digital Television
Broadcasting;

MoCI Decree No. 48/PER/M.KOMINFO/11/2009 dated November 23, 2009 regarding
Providing of Internet Access Services in Sub-District Internet Telecommunication
Universal Services Area;

MoCI Regulation No. 01/PER/M.KOMINFO/01/2010 dated January 25, 2010 regarding
The Operation of Telecommunication Network; and

MoCI Regulation No.32/PER/M.KOMINFO/10/2008 dated October 10, 2008 regarding
Universal Telecommunication Service Obligations, as amended by MoCI Regulation
No.03/PER/M.KOMINFO/02/2010 dated February 1, 2010.
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FIXED LINE SECTOR – KEY PLAYERS
PT Telekomunikasi Indonesia, Tbk (TELKOM)
(Website : http://www.telkom-indonesia.com)
PT Telekomunikasi Indonesia, Tbk. (TELKOM) is the largest telecommunication and network
services provider in Indonesia. Serving millions of customers nationwide, Telkom provide a
strong portfolio of information and communication services, including fixed wireline and
fixed wireless telephone, mobile cellular, data and internet, and network and
interconnection services, directly or through our subsidiaries.
By the end of 2009, the customer base had grown 21.2% to 105.1 million customers.
Telkom are now serving 8.4 million fixed wireline telephone subscribers, 15.1 million fixed
wireless telephone subscribers and 81.6 million mobile telephone subscribers.
As of December 31, 2009, the majority of Telkom’s Common Stock was owned by the
Government, with the remaining under public ownership. The shares are traded on the IDX,
the NySE, the LSE and are publicly offered without listing in Japan. The share price on the
IDX on December 31, 2009 was Rp9,450. At the end of 2009, the market capitalization was
Rp190,512.0 billion, or 9.43% of the total market capitalization of the IDX.
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To meet the challenges of the growing demand for seamless connectivity and mobility,
Telkom have broadened the business portfolio to encompass TIME — telecommunications,
information, media and edutainment. By enhancing the infrastructure, deploying Next
Generation Network technology and mobilizing synergies across the group, Telkom are
enabling and empowering home and business customers by delivering greater quality,
speeds, reliability and customer service.
During 2009, the consolidated net income was Rp11,332.1 billion, an increase of 6.7%
compared to 2008, and equivalent to 100.8% of the target. Meanwhile, net income margin
stood at 17.5% in 2009, representing an achievement of 105.4% of the target net income
margin.
This financial performance was supported by TELKOM’s solid operational performance. In
terms of serving customers, Telkom are now serving 105.2 million customers from The
cellular, fixed wireless and fixed wireline businesses, representing an achievement of 106%
of the target. This increase was led by the cellular business, which brought in another 16.34
million customers, achieving 162% of the target for 2009.
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Strong financial results and growth in 2009 :
 Telkom Group Revenue increase 6,4%, EBITDA 5,6% and Net Income 6,7%.
 Cellular and Internet performed very well
 Group synergy, focusing primarily on cost management, tower sharing, network
infrastructure, and service focus across the group, showed tangible result.
 New Brand Identity launched at parent and all subsidiaries follow, it already showed
national awareness.
 Strategies of defending legacy and grow new wave were executed ans started to
show results.
 Cost is manageable, and ERP was enlarged to Rp. 1 Trillion, executed well.
 M&A with financial discipline exhibited
 Improvement on the timing and quality of Annual Report issuance from Mid March to
early April.
 Results :
o Data, Internet and IT Growth 25,8%
o Cellular Growth 7,4%
o (with exception) Fixed Line decline 11,2%
 Strong fundamental for sustainable competitive growth
Business Pillars
5 Business Pillars of TELKOM :
1. Fixed Phone (Telkom Phone) : Personal Line, Corporate Line, Telephony Café and
Public Telephony Services
2. Mobile Phone (Telkomsel) : Prepaid and Postpaid Services
3. Network and Interconnection (Telkom Intercarrier) : Interconnection service,
Network Leased Service.
4. Data and Internet : Leased Channel Service (Telkom Link), Internet Service
(Telkomnet), VoIP Service (Telkom Save and Global 017), SMS Service (Telkomsel,
Telkom Flexi).
5. Fixed Wireless Access (Telkom Flexi) : Prepaid and Postpaid Services.
Telkom Business Group & Units
TELKOM's Business Unit consisted of Division, Centre, Foundation and Subsidiary
company as follows:
1. Division of Long Distance
2. Carrier & Interconnection Service Center
3. Division of Multimedia
4. Division of Fixed Wireless Network
5. Enterprise Service Center
6. Customer Service of Sumatera Region
7. Customer Service of Jakarta Metropolitan Area
8. Customer Service of west Java Region
9. Customer Service Central of Java and Yogyakarta Region
10. Customer Service of East Java Region
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11. Customer Service of Kalimantan Region
12. Customer Service of East Indonesia Region
13. Maintenance Service Center
14. Training Center
15. Carrier Development Support Center
16. Management Consulting Center
17. Construction Center
18. I/S Center
19. R&D Center
20. Community Development Center (CDC)
Foundations:
1.
2.
3.
4.
Dana Pensiun (Dapentel)
TELKOM Educational Foundation (YPT)
Yayasan Kesehatan
Yayasan Sandhykara Putra Telkom (YSPT)
Subsidiary Companies:
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TELKOM fixed line network comprises a hierarchy of exchanges ranging from local
exchanges through trunk exchanges. Each local exchange is connected to the subscriber’s
premises by equipment and facilities called outside plant. Outside plant includes wireline
(optical fiber and copper) and wireless local transmission links and the distribution facilities
joining them. Now, our switching facilities at the local and trunk exchanges are digital.
TELKOM believe that this substantially increases network efficiency, performance and call
routing flexibility.
TELKOM target is to be a full NGN Service Network by 2014. The main objectives of NGN
transformation are reduction of OPEX and CAPEX, the possibility to provide new customized
services, simplification of network architecture, reduction in number and type of equipment
and more efficient use of available bandwidth.
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PT Indosat, Tbk
(http://www.indosat.com)
PT Indosat Tbk was established by the Government on November 10, 1967 as a foreign
investment company to provide international telecommunications services in Indonesia and
began commercial operations in September 1969 to build, transfer and operate an
International Telecommunications Satellite Organization, or Intelsat, earth station in
Indonesia to access Intelsat’s Indian Ocean Region satellites for a period of 20 years. As a
global consortium of international satellite communications organizations, Intelsat owns and
operates a number of telecommunications satellites.
Following regulatory changes in the Indonesian telecommunications industry in 1999 and
2000, Indosat began implementing a strategy designed to transform it from being
Indonesia’s primary international telecommunications provider into a leading, fully
integrated telecommunications network and service providerin Indonesia. In 2000, the
Government’s introduction of the Telecommunications Law, which encourages industry
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liberalization, directly impacted our business. In 2001, as part of the Government’s initiative
to restructure the telecommunications industry, Indosat entered into an agreement with
Telkom to eliminate the respective crossshareholdings in several operating subsidiaries,
including:
 the acquisition of Telkom’s 22.5% ownership interest in Satelindo;
 Telkom’s acquisition of Indosat 35.0% ownership interest in Telkomsel; and
 the acquisition of Telkom’s 37.2% ownership interest in Lintasarta and the purchase
of Lintasarta’s convertible bonds held by Telkom.
Subsequent to the agreement with Telkom, Indosat acquired an effective 45.0% ownership
interest in Satelindo, through our acquisition of PT Bimagraha Telekomindo, or Bimagraha,
in 2001 and acquired the remaining 25.0% ownership interest in Satelindo from DeTe Asia
in June 2002. To strengthen Satelindo’s capital structure and remove certain restrictive
covenants arising from Satelindo’s indebtedness, Indosat made an additional capital
contribution to Satelindo totaling US$75.0 million in July 2002.
In August 2002, Indosat entered the domestic telecommunications sector by obtaining a
license to provide local fixed network services in the Jakarta and Surabaya areas. Indosat
deployed approximately 13,000 lines in those areas to provide local fixed telephone services
and announced the strategic objective to become a leading fully integrated
telecommunications network and service provider in Indonesia. In 2002, the Government
divested 517.5 million shares, representing approximately 50.0% of our outstanding Series
B shares at the time, in two stages. In May 2002, the Government sold 8.1% of the
outstanding shares through an accelerated global tender.
In December 2002, the Government divested 41.9% of the outstanding Series B shares to a
former subsidiary of STT. As of March 31, 2009, the Government owned 14.29% of the
outstanding shares, including the one Series A share, and ICLM and ICLS owned
approximately 65.0% of the outstanding Series B shares. ICLM and ICLS are owned by Qtel.
The remaining 20.71% of the outstanding Series B shares is owned by public shareholders
as of March 31, 2009.
On November 20, 2003, Indosat merged with Satelindo, Bimagraha and IM3 and all assets
and liabilities of such legacy subsidiaries were transferred to Indosat on such date. Since
entering the Indonesian cellular market through the acquisition of Satelindo and
establishment of IM3 and the subsequent integration of such companies in 2003, cellular
services have become the largest contributor to the operating revenues.
On June 22, 2008, Qtel purchased all of the issued and outstanding shares of capital stock
of each of ICLM and ICLS, pursuant to a Share Purchase Agreement dated June 6, 2008
between Qtel and STT, a company incorporated in Singapore. Pursuant to the Share
Purchase Agreement, Qtel, through its subsidiary, Qatar South East Asia Holding S.P.C.,
acquired the capital stock of ICLM and ICLS from Asia Mobile Holdings Pte. Ltd., or AMH, a
company incorporated in Singapore, which is 75.0% indirectly owned by STT
Communications Ltd. and 25.0% indirectly owned by Qtel. Following this acquisition, a
change of control occurred in Indosat and Qtel, and its wholly owned subsidiaries, ICLS and
Qatar South East Asia Holding S.P.C., conducted a mandatory tender offer to acquire up to
1,314,466,775 Series B Shares, representing approximately 24.19% of the total issued and
outstanding Series B Shares (including Series B Shares represented by ADSs), at a
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purchase price of the U.S. dollar equivalent of Rp369,400 per ADS and Rp7,388 per Series B
Share, net to the seller in cash (without interest and subject to any required withholding of
taxes). Following settlement of the tender offer on March 5, 2009, Qtel and its subsidiaries
hold approximately 65.0% of the outstanding share capital.
Shareholders (as of December 2008)
ICL Entities
65.00%
Government of Indonesia
14.29%
Public
20.71%
For the twelve months ended 31 December 2009, the Company recorded a slight decline of
1.4% in consolidated operating revenue to Rp18. 39 trillion, with an EBITDA* margin of
48%. Indosat’s cellular, fixed data (MIDI) and fixed voice businesses contributed 76%, 15%
and 9% respectively to the Company’s consolidated operating revenue.
On a quarterly basis, the Company added a net 4.4 million cellular customers, which
contributed to an increase in quarterly cellular revenue of over 12% in 4Q 2009.
On a year -on-year basis, cellular revenues decreased by 1.8% to Rp13.93 trillion as a
result of a clean-up of the pre -paid subscriber records in the first half of 2009. Fixed data
revenue decreased by 0.5% while fixed voice revenue decreased by 0.1%.
Operating expenses increased by 9.0% for the 12 months ended 31 December 2009 as a
result of higher depreciation and amortization charges, government levies and site and
rental costs.
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Results Highlights :



While YoY operating revenues showed a slight decline, 4Q2009 over 3Q2009, cellular
revenues increased by 12.2%, as the company began to benefit from its strategic
shift towards a value and segmented approach to the market. The FY2009 decline in
cellular revenue of 1.8% resulted from the 9.2% decrease in cellular subscribers,
(from 36.5 million at the end of 2008 to 33.1 million at the end of 2009) as the
company reduced calling card type behavior and focused on higher value customers.
Revenue from Fixed Data (MIDI) services decreased slightly by 0.5% YoY, as a result
of a decrease in international & domestic leased lines. On a 4Q2009 vs. 3Q2009
basis, revenues in the segment increased by 16% owing to successful sales
initiatives undertaken in 4Q2009.
Fixed Voice (Fixed Telecom) revenues decreased slightly by 0.1% resulting from
decreased IDD outgoing revenue, largely inline with a decrease in non-Indosat
originated outgoing IDD traffic.
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Board of Directors :
Harry Sasongko Tirtotjondro
Mr. Harry Sasongko is the President Director of Indosat started on August
11, 2009.
Laszlo Barta
Mr. Laszlo Barta will be joining Indosat as a Director and Chief Commercial
Officer on 1 May 2010. Prior to joining Indosat, he was Deputy Chief
Marketing Officer at Grameenphone in Bangladesh.
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Fadzri Santosa
Mr. Fadzri Santosa is a Director and Chief Wholesale and Infrastructure,
since June 2009, and previously he has been the Director of Jabotabek and
Corporate Sales since June 2007.
Peter Kuncewicz
Mr. Peter Kuncewicz is a Director of Indosat since September 1st, 2009 as
the Chief Financial Officer.
Steve Hobbs
Mr. Steve Hobbs is a Director of Indosat since June 11, 2009 as a Chief
Technology Officer (CTO). Mr Hobbs has over three decades of
international management experience in the telecommunications and
technology industries across Europe and Asia.
PT Bakrie Telecom, Tbk
On January 23, 2009, the Company received a principal license for fixed direct line direct
long-distance connection, based on Decision Letter of the Minister of Communication and
Information of the Republic of Indonesia No. 31/KEP/M.KOMINFO/01/2009; this was also
approved on December 16, 2008 based on Minister Decree No. 379/KEP/
M.KOMINFO/12/2008, which indicates the selected service providers for fixed direct line
long-distance connection.
On February 12, 2009, the Company received a license for International Fixed-Line Direct
Connection (SLI) and basic telephone service, based on Decision Letter of the Minister of
Communication
and
Information
of
the
Republic
of
Indonesia
No.
59/KEP/M.KOMINFO/02/2009 about license for International Fixed-Line Direct Connection
PT Bakrie Telecom Tbk. The SLI lisence will be evaluated annually and will be fully evaluated
every five (5) years.
On April 2009, Bakrie Telecom made history by ending the duopoly era in Indonesia’s
international direct dial services by launching its “SLI Hemat 009” This new service features
real clear channel voice connection, but still adheres to BTEL’s simple and affordable
principle. SLI 009 offers up to 77% tariff discount for certain call destinations compare to
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the existing services. These all-day-every-day low tariffs are applicable for both calls from
and to PSTN or mobile phone.
It means that Indonesia has three SLI operators, while previously two operators dominated
the market, PT Telkom with SLI 007 (premium rate) and 017 (economy rate), as well as PT
Indosat using 001 for its premium rate and 008 for the economic rate. Bakrie Telecom this
year launched its 009 access code based on Communications and Information Ministry
Regulation No. 59/2009.
For its SLI services with 009 access code, Bakrie Telecom has invested more than US$25
million for the network infrastructure, such as a number of SGIs in a number of major cities
in the country. In the near future, three more SGIs will be developed in Surabaya, Makassar
and Medan.
With Bakrie Telecom being a new player in SLI services, it has to offer more benefits to win
customers' hearts. One of the plus points is that SLI 009 has a lower rate and a better voice
quality. "The rates are up to 77 percent lower than those of our competitors," said Erik
Meijer, vice president director of Bakrie Telecom.
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Although the rates are lower, Bakrie Telecom assures that the voice quality is crystal clear
as it is channeled not through the Internet network or VoIP (voice over Internet protocol),
but via uncompressed real clear channel voice connection. It therefore uses the slogan
"Suara Bening, Harga Banting" or "Cheap Choice for Clear Voice", to show that the company
is concerned about offering the best rates while providing excellent service.
For the introduction period, there is a special rate for calls to the US and some Asian
countries, such as China, Hong Kong, Singapore, Malaysia, Brunei, Thailand, South Korea
and Taiwan. "It is only Rp 49 per second, exclusive of sales tax, and is for both peak and off
peak hours as well as holidays," added Erik Meijer.
Currently, Bakrie Telecom is conducting an aggressive promotion campaign through various
media, including major TV stations. By informing potential customers about its low rates
and crystal clear voice it is expected that more customers will switch to Bakrie Telecom's
products, such as Esia, Wifone and Wimode.
For detail about Bakrie Telecom, you can find it below at CDMA Key Players.
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GSM OPERATORS - KEY PLAYERS
PT Telekomunikasi Selular, Tbk (TELKOMSEL)
(http://www.telkomsel.com)
PT Telekomunikasi Selular (Telkomsel) was officially established in 1995. The Company is
65% owned by PT Telekomunikasi Indonesia, Tbk. (Telkom) and 35% owned by SingTel
Mobile, a 100% owned subsidiary of Singapore Telecommunications Ltd. (SingTel).
Telkom, which owns 65% of Telkomsel´s issued share capital, is the largest full-service
telecommunications operator in Indonesia. Telkom is listed on the Jakarta Stock Exchange
(" JSX" : TLKM), the New York Stock Exchange (" NYSE" : TLK) and the London Stock
Exchange (" LSE" : TKID) and is majority-owned by the Government of Indonesia.
SingTel Mobile owns 35% of Telkomsel´s issued share capital and is a wholly owned
subsidiary of Singapore Telecommunications Limited (" SingTel"). SingTel is one of Asia’s
leading telecommunications service operators. SingTel is listed on the Singapore Exchange
(" SGX" : ST ) and the Australian Stock Exchange Limited (" ASX" : SGT ). SingTel is
ultimately majority-owned by the Government of Singapore.
At the end of 2001, SingTel Mobile purchased the shares in Telkomsel which were until then
held by KPN Royal Dutch Telecom of The Netherlands (17.28%) and Setdco Megacell Asia
(5%). Mid 2002 SingTel Mobile acquired an additional 12.72% from Telkom to bring its total
to the current 35%.
Telkomsel is the largest mobile telecommunication company in Indonesia with a market
share of subscribers of approximately 49%. Telkomsel provides cellular services in
Indonesia, through its own nationwide dual-band GSM 900-1800 MHz, 3G network, and
internationally, through 323 international roaming partners in 170 countries (end of
September 2008). In September 2006, Telkomsel became the first operator in Indonesia to
launch 3G services.
The company provides its subscribers with the choice between two prepaid cards-simPATI
and Kartu As, or the post-paid kartuHALO service, as well as a variety of value-added
services and programs.
Telkomsel's operations in Indonesia have grown substantially since the commercial launch
of its post-paid services on 26 May 1995. In November 1997, Telkomsel became the first
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cellular telecommunications operator in Asia to introduce rechargeable GSM pre-paid
services.
Telkomsel has the largest network coverage of any of the cellular operators in Indonesia,
providing network coverage to approximately 95% of Indonesia's population and is the only
operator in Indonesia that covers all of the country's provinces and regencies, and all
counties ("kecamatan") in Sumatra, Java, and Bali/Nusra. The company offers GSM Dual
Band (900 & 1800), GPRS, Wi-Fi, EDGE, and 3G Technology.
In first quarter of 2010, Telkomsel gross operating revenues reached Rp10.67 trillion, an
increase of 9% compared to the same period last year. EBITDA and Net Income reached Rp
6.40 trillion (9% growth) and Rp 2.84 trillion (10% growth), respectively. The customer
base grew 14% year-on-year (YoY) to 81.95 million customers. The growth was mainly
attributable to increase in prepaid revenue, particularly on Kartu As.






Postpaid revenues increased 8% to Rp 1.08 trillion due to increase in nonvoice/data revenue as reflected by increase of non-voice/data ARPU.
Prepaid revenues, which accounted for 81% of operating revenues, grew 8% to Rp
8.69 trillion.
Prepaid revenues were mainly (78%) contributed by simPATI product. However, the
YoY growth was mainly from Kartu As product that recorded a strong growth on
minutes of use (MoU) and data revenues. simPATI product, which recorded a YoY
decline on traffic, still recorded a positive revenue growth due to higher revenue per
minute and revenue per SMS in 1Q10 compared to 1Q09.
International roaming revenues decreased 4% to Rp 153 billion as a result of a
decline in revenue from inbound roamers combined with increase in revenue from
outbound roamers.
Interconnection revenues increased 5% to Rp 626 billion, which was due to
increase in incoming interconnection traffic as a result of off-net promotion from
other operators.
Other operating revenues increased 196% to Rp 125 billion which was mainly due
to increase in leased towers and USO compensation.
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The following are the highlights of Telkomsel’s financial and operational results for Q1-2010:
Operating Revenues (gross)
Rp 10.67 trillion
EBITDA
Rp 6.40 trillion
Net Income
Rp 2.84 trillion
Total Customer Base
81.95 million customers
EBITDA Margin (gross)
60%
On February 18, 2010 Telkomsel introduced iPhone 3GS which are available at GraPARIs
and other official distributors (Oke Shop, Global Teleshop, Sarindo and Telesindo Shop).
In February 2010, Telkomsel officially started BTS Go Green program, using eco-friendly
energy such as solar cell to provide power to operate the BTS. Up to this moment,
Telkomsel already had 132 BTS Go Green, scattered in Sumatera (33 BTS), Jawa (22 BTS),
Bali Nusa Tenggara (23 BTS), Kalimantan (18 BTS) and Sulawesi Maluku Papua (36 BTS).
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In line with Telkomsel business transformation to the new data-based era, on 24 February
2010, Telkomsel launched Mobile Advertising service, a business solution for all business
players where commercial message can be sent directly to customers in a massive and
targeted way.
To give a wider and more affordable access to customers, in March 2010 Telkomsel
launched a new simPATI starter pack priced at Rp 5000. The starter pack includes additional
100 SMS, 1MB internet access and also content, RBT and weekly social networking
packages.
Board of Directors:
President Director
Director of Planning & Development
Director of Commerce
Director of Finance
Director of Operation
Mr. Sarwoto Atmosutarno
Ms. Herfini Haryono
Mr. Leong Shi Loong
Ms. Triwahyusari
Mr. David Ng
PT Indosat, Tbk (GSM Division – Matrix and IM3)
(http://www.indosat.com)
On November 2003, following the signing of the Merger Deed to merge Satelindo, IM3 and
Bimagraha into Indosat, Indosat emerges as a cellular focused Full Network Service Provider
(FNSP). By consolidating its cellular, fixed telecommunications and MIDI services into a
single organization, Indosat is well-positioned to be the telecommunication service provider
with the comprehensive range of products offering in Indonesia. This was followed by a
comprehensive transformation program, launched in 2004, encompassing in human
resouces, technology, platform and corporate culture and values. The transformation has
started to demonstrate encouraging results as the company posted record revenues that
surpassed Rp 10 trilion threshold and increased in margin its 10th year as a publicly listed
company.
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Indosat launched its 3.5G for the Jakarta and Surabaya regions in November 29, 2006.
Indosat 3.5G in the intermediate generation of the 3G technology, which enables
subscribers to enjoy better quality voice, video or hifh speed data/internet access of up to
3.6 Mbps or around 9 times faster than standard 3G service. All Indosat node B has utilized
the HSDPA (High Speed Downlink Packet Access) technology. Indosat is the first 3G
operator, which fully adopt the HSDPA technology base in Indonesia.
PT Indosat Tbk (ISAT), GSM-based operator that is controlled by Qatar Telecom, posted
2009 total subscribers of 33.1 million, beating PT XL Axiata Tbk (XL)'s numbers of 31.4
million.
Indosat is also planning to refinance debt maturity of Rp4.5 trillion this year. Indosat has
invited around nine investment banks such as Barclays, Citi, Credit Suisse, Deutsche, JP
Morgan, RBS, and Standard Chartered Bank to submit an optimum strategy of financing in
relation with bonds issue.
According to a research report published by PT Danareksa Sekuritas, the operator needs
US$600 million-US$700 million of capital expenditure this year, similar with last year capex.
Indosat net profit at the end of year 2009 fell 20% mostly because of lower revenue and the
higher cost of operations. Net profit for the January-to-December period fell to IDR 1.5
trillion from IDR 1.88 trillion in the previous year. Total revenue fell 1.4% to IDR 18.39
trillion from IDR 18.66 trillion by the end of 2009.
The cost of operations rose 9% to IDR 15.18 trillion from IDR 13.93 trillion in the previous
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year. Indosat had an additional 4.4 million new subscribers in the fourth quarter of 2009,
which helped contribute a 37% increase in revenue from cellular services from the previous
quarter. Revenue in the fourth quarter of 2009 rose to IDR 18.4 trillion from IDR 13.4
trillion by the end of the third quarter.By the end of 2009, its total subscribers were at 33.1
million, down 9.3% from 36.5 million in the previous year.
Indosat Corporate Solutions
Indosat corporate integrated telecommunication service includes solutions for voice, mobile
data, connectivity, value added services (VAS) and hosting.
These services will help companies in all industries to improve performance and
effectiveness.

VOICE SOLUTIONS is a fixed- and mobile-based voice solutions tailored to specific
corporate needs. Solutions offered: I-Phone, cellular, fixed wireless and combination
of all three.

MOBILE SOLUTIONS offers corporate mobile solutions for a company’s employees
and customers. Solutions include Corporate User Group (CUG), GSM PBX Integration,
Mobile Banking and Vehicle Tracking.

CONNECTIVITY SOLUTIONS provides options to best telecommunication backbone
network, including fiber optic, satellite or sophisticated wireless technology.
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
VAS & HOSTING SOLUTIONS provides VAS solutions to enrich your corporate
telecommunication facilities. This includes SMS Bulk, Disaster Recovery Center, VAS
applications and I-Ring Corporate.
Blackberry Enterprise Service on Demand
In December 2010, Indosat presented an innovative service called BlackBerry Enterprise Service On
Demand. Unlike any other BES in general, this world’s first service allows BES to be used by small and
medium companies as well as communities.
In order to support the service, Indosat has also upgraded the capacity of router interface that links
Indosat backbone to RIM for BlackBerry services to 1 Gbps. Now that the router interface has been
upgraded, Indosat customers could enjoy various advantages from Indosat’s BlackBerry services.
Aside from the completeness of BlackBerry service options for prepaid and postpaid phones, Indosat
also claims being able to present the reliability, the speed, and the stability of data network that is
integrated from Sabang to Merauke and even overseas with its international roaming partners.
Indosat Presents Android
In February 2010, Indosat has just launched its first Android-based services in Indonesia.
Hoping to create a remarkable sign, Indosat is presenting six Android mobile phones, which
are the outcome of the collaboration with six major sole authorized agents (ATPM).
The agents and their devices are HTC with HTC Hero, Motorola with Motorola Milestone,
Samsung with Samsung Galaxy Spica, LG with LG GW 620, Huawei with U8230 and Sony
Ericsson with Xperia X10.
In total, Indosat has prepared 50 thousand units of Android mobile phones from the six
producers.
Indosat has merged Google-owned Android App Store with Indosat Market Store. Therefore,
Android Indosat subscribers will be able to use both Android and the local contents in one
device.
PT XL Axiata, Tbk (XL)
(http://www.xl.co.id)
PT XL Axiata (XL) was founded on 6 October 1989, under the name PT Grahametropolitan
Lestari. Its main business was in trading and general services.
Six years later, the company took an important step by setting up a cooperation with
Rajawali Group – a shareholder of PT Grahametropolitan Lestari - and three foreign
investors (NYNEX, AIF and Mitsui). Its name was changed to PT Excelcomindo Pratama, with
the provision of basic telephony services as its core business.
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XL commenced commercial operations in 1996, primarily covering Jakarta, Bandung and
Surabaya areas. This had made XL the first private company in Indonesia that provides
cellular mobile telephony services.
September 2005 was a milestone for the company. Upsizing on all fronts, XL became a
public company listed on the Jakarta Stock Exchange [now known as the Indonesia Stock
Exchange (IDX)]. Currently, the majority of XL’s shares are held by TM International Berhad
through Indocel Holding Sdn. Bhd. (83.8%) and Emirates Telecommunications Corporation
(Etisalat) through Etisalat International Indonesia Ltd. (16.0%).
XL has now taken the lead in the industry as the cellular telecommunications provider with
extensive coverage throughout Indonesia. It provides services for retail customers and
offers business solutions for corporate customers, including voice, data and other valueadded mobile telecommunications services. XL operates its network with GSM 900/DCS
1800 and IMT-2000/3G technologies. XL also holds a Closed Regular Network License,
Internet Service Provider (ISP) License, Voice over Internet Protocol (VoIP) License and
Internet Interconnection Services License (NAP).
XL is a major cellular provider in Indonesia which is majority owned by Axiata Group Berhad
(formerly known as TM International Berhad) through Indocel Holding Sdn Bhd (83.8%),
the remaining stakes are held by Emirates Telecommunications Corporation (Etisalat)
International Indonesia Ltd., a wholly owned subsidiary of Etisalat (16%), and the public
(0.2%).
In June 2009, XL launched new company logo by adding Axiata Logo to the existing logo as
a sign of added synergy with Axiata. Following the new logo, effective December 2009, XL
also changed its company name to PT XL Axiata, Tbk.
At the end of year 2009, XL achieved gross revenue of Rp 13,880 Billion, EBITDA of Rp.
6,205 Billion with EBITDA Margin of 45%, and total subscriber of 31,4 Million
As part of its vision to be Indonesia’s cellular champion by delighting customers,
shareholders, and employees, XL has positioned the company for long term growth based
on the principles of maximizing value creation and return through
growing revenue
profitably, operational efficiency, and capital productivity.
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XL successfully outperformed the industry in terms of revenue and EBITDA growth. Its more
affordable tariffs encouraged heavy usage from subscribers whwich helped drive revenue
growth. XL has also been practicing smart spending which led to stable Operating Expenses
in spite of the revenue increase. The combination of top line growth combined with lean cost
management has allowd EBITDA to grow faster than revenue growth and therefore, the
margin has also improved.
Cellular Telecommunication Services
Revenue from cellular telecommunication services grew 15% YoY. The main source of
revenue is still voice service which contributed 51% of the total revenue. The 7% YoY
modest growth of voice services revenue is the result of 60% increase of Outgoing minutes
and 21% subcriber growth compared to 2008. Non-voice services, which consist of SMS,
data, Blackberry, Internet, and VAS grew by 32% due to several SMS packages and data
services were launched this year that attracted subscribers for usage. There were many new
models of smart phones that were launched in 2009, especially by Blackberry handset. This
trend led to an increased demand for data, which is one of the main contributors of this
segment.
Cellular Interconnection and International Roaming Services
Revenue from cellular interconnections and international roaming services did not
experience major YoY growth in 2009 due to the decrease of interconnection revenue which
was offset by the increase of international roaming. Interconnection roaming revenue
decreased due to increased number of Point of Interconnections that mean more calls were
charged locally. On the other hand, international roaming revenue increased due to the
increase in international voice partnerships.
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Other Telecommunications Services
Other Telecommunications services had a 30% increase to Rp. 1,1 Trillion, and contributed
8% to the total revenue. The main source of growth was the 117% increase in leased
towers. Compared to full year 2008, XL leased out 30% more towers in 2009.
Discounts
Discounts comprising of discounts on VoIP revenue, cellular revenue, and leased line
revenue, increased by 83% tp Rp. 173 Billion. XL offers simple affordable tariffs, instead of
offering discounts through promotions.
Board of Director :
President Director
Director of Corporate Services (resigned March 18,2010)
Director of Marketing
Director of Commerce
Mr.
Mr.
Mr.
Mr.
Director of Finance
Director of Network
Mr. Willem Lucas Timmermans
Ms. Dian Siswarini
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Hasnul Suhaimi
Joris de Fretes
P. Nicanor V. Santiago III
Joy Wahyudi
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PT Hutchison CP Telecommunication (Three)
(http://www.three.co.id)
HCPT or Three operation further expanded its customer base in 2009 by adding over four
million customers and exited the year with more than 8.5 million customers. This growth
was achieved through a growing sales and distribution network of approximately 110,000
sales outlets and increased coverage of HCPT network. To date HCPT network has more
than 8,800 on-air base stations covering 76% population of the country.
Turnover increased 93.0% to HK$608 million compared to HK$315 million in 2008, driven
mainly by the 89.5% growth in customer base. LBITDA was HK$1,300 million, compared to
HK$1,153 million in 2008, and the increase was due mainly to the increased network costs
as a result of the expanded footprint. The increase in network costs and other operating
expenses was partially offset by the foreign exchange gain that arose from the translation of
the finance lease obligations related to the sale and leaseback of the base station tower
sites, while in 2008 an exchange loss was recorded.
Profit on disposal of investments and others, net was HK$423 million, including a profit of
HK$268 million on the disposal of base station tower sites and other income of HK$155
million mainly related to compensation received from network suppliers in the form of credit
vouchers. During the year, 969 base station tower sites were sold to PT Profesional
Telekomunikasi Indonesia (“Protelindo”). Together with 2,248 tower sites sold in 2008, a
total of 3,217 base station tower sites were sold by the end of 2009.
Operating loss for the year was HK$1,456 million compared to HK$353 million in 2008. If
the profit on disposal of investments and others, net was excluded in each year, the HCPT
operation would have reported an operating loss of HK$1,879 million in 2009 compared to
HK$1,549 million in 2008.
Capital expenditure on fixed assets in 2009 was HK$2,864 million compared to HK$3,030
million in 2008, and was mainly for the network rollout and information technology platform
to support the business growth.
Total debt at the end of 2009 was HK$1,916 million compared to HK$2,034 million in 2008.
This included mainly the finance lease obligation amounting to HK$1,697 million and
HK$1,086 million in 2009 and 2008 respectively, arising from the sale and leaseback
arrangement of the base station tower sites sold to Protelindo. A vendor finance loan of
HK$948 million included in the total debt of 2008 was fully repaid during the fi rst half of
2009, the repayment was funded by drawing down the loan facility provided by a subsidiary
of HWL.
Accelerated Network Expansion
During 2009, HCPT continued to make solid progress in network expansion, distribution and
development of an innovative portfolio of products and services in an intensely competitive
market.
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HCPT takes pride in being the first and only mobile operator in Indonesia to have rolled out
service throughout the four largest islands of the country in less than three years since
launch.
During the year, HCPT added approximately 2,400 on-air base stations, making a total of
over 8,700 that cover 76% of the total population. HCPT now serves Bali, Lombok,
Sumatra, Kalimantan, Sulawesi and Java, with network coverage widened to Manado in
North Sulawesi on the east side of the country during the third quarter of 2009.
The operation continues to benefit from being one of the first operators to implement a
tower leasing and site sharing strategy in Indonesia, which has enabled HCPT to expand its
network footprint speedily and at the same time focus the business on customer growth via
innovative marketing and a strong brand image.
Board of Directors :
President Director
Director of Commercial
GM Operation
GM Marketing Communication
Mr. Manjot Singh Mann
Mr. Suresh Reddy
Mr. Wiryawan Isjwara
Ms. Ariani Widowati
PT Natrindo Telepon Selular (AXIS)
(http://www.axisworld.co.id)
PT Natrindo Telepon Seluler, as the holder of registered trademark of AXIS, is a national
GSM and 3G cellular service provider in Indonesia, offering innovative and affordable
wireless communications services within its service areas. The company began operations in
Java and Sumatra, and is rapidly expanding its 2G and 3G networks to major market and
population centers throughout the archipelago.
The AXIS brand and logo is a symbol of progressiveness and change. Their goal is for
subscribers to enjoy the full benefit of mobile communications services, which will enrich the
way they work and play.
AXIS is supported by two prominent operators in Asia: Saudi Telecom Company, the
national telecommunications service provider in the Kingdom of Saudi Arabia; and Maxis
Communications Berhad, the largest mobile services provider in Malaysia. These two major
investors are committed to the full development of the Indonesian telecommunications
sector.
At AXIS They believe that it is not just "what They do" that is important, but also "how They
do it." They always aim to carry out Their activities responsibly and have fun doing so.
Wherever they are, they feel an obligation to do business with integrity, as expressed in
their Code of Conduct and corporate values.
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AXIS is proud to be a responsible corporate citizen. AXIS corporate social responsibility
(CSR) activities embrace all stakeholders, involving local communities and societies. AXIS
are committed to play AXIS role to enhance the lives of those that AXIS are involved with,
and to support the Indonesian government's telecommunications objectives.
AXIS currently employs over 400 professionals nationwide, led by a team of experience
professionals. The company aspires to be an exciting and dynamic organization. It provides
a unique work environment that enables young professionals to develop themselves within a
corporate culture that promotes passion, inspiration, accountability, speed, and motivation.
AXIS launched in February 2008 and is already available in over 90 cities across East Java,
west Java, Jabodetabek, Banten, Central Java, Bali, Lombok, Medan, Riau Islands and Riau
Mainland. With up to 80 base stations being built every week, AXIS national network
expansion is progressing aggressively. AXIS” vision is to provide affordable communications
to all Indonesians. AXIS is owned by Saudi Telecom Company (STC), the no. 1 GSM
operator in Saudi Arabia, and by Maxis Communications, the no. 1 GSM operator in
Malaysia. Together, these companies serve more than 45 million customers with operations
in 9 countries.
AXIS is the country’s newest network operator, having rolled out GSM cellular services
across Java, Bali, Lombok and Sumatra in 2008. It is now rapidly expanding its 2G and 3G
technologies networks to major market and population centres throughout Indonesia.
AXIS is supported by two prominent operators in Asia: Saudi Telecom Company, the
national telecommunications service provider in the Kingdom of Saudi Arabia; and Maxis
Communications, the largest mobile services provider in Malaysia. These two major
investors are committed to the full development of the Indonesian telecommunications
sector.
Established in 1998, Saudi Telecom Company (STC) provides a wide range of
telecommunications services such as fixed-line, mobile, internet, and data. The company
operates through four subsidiaries (Alhatif, Aljawal, Saudi Data, and Saudinet) and is the
sole provider of fixed-line, data, and internet services in Saudi Arabia.
In 2005, the Saudi Government diluted its stake in the company by offering 30% of the
equity to Saudi nationals. By the third quarter of 2006, STC had a market share of around
71% in Saudi Arabia. Its current market capital is around US$40.5 billion.
Maxis Communications is the leading mobile operator in Malaysia, with telephony
investments in India and Indonesia. Maxis provides mobile and fixed line services, as well as
international gateway services.
As of 31 March 2007, Maxis had a total mobile subscriber base of 8.5 million in Malaysia
(representing a market share of 41.5%). Maxis recorded RM 6.96 billion in revenue and RM
3.76 billion in EBITDA for the fiscal year ended 31 December 2006.
In January 2010, AXIS announced that its service becomes commercially available across
whole Sumatera Island, including Aceh, Jambi, Bengkulu, Palembang, Bangka, Belitung and
Lampung, which for mobile consumers in this region mean they have more choice of quality
and affordable GSM services.
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With Aceh and Southern Sumatera service launch, AXIS will provide more than 65%
Indonesian population to access its simple and affordable mobile products and services.
Prior to this launch, AXIS has commercially launched its service in Medan, Pekanbaru and
Batam in August 2008 and Padang in April 2009.
Innovative partnerships and continued investment are driving AXIS rapid expansion and
enabling the company to provide immediate consumer benefit of having faster and wider
coverage. AXIS first launched its service in February 2008 and currently provides its service
to more than six million subscribers nationwide. In less than two years of its operations, the
company has built more than 4200 BTSs across the country with an average of more than
140 BTSs being built every month.
AXIS mission is to make GSM affordable to all Indonesians. The company brings simple best
value pricing to consumers as well as its unique approach to restore control to customers
through tariffs that are understandable, transparent and competitively priced. The
innovative partnerships will allow AXIS to have more than 80% population coverage and will
be available in more than 400 cities across Indonesia including Kalimantan and Sulawesi by
end of 2010.
Board of Directors :
President Director
Chief Marketing Officer
Chief Technology Officer
Chief Financial Officer
Director of Human Resources
Economic Department
Embassy of Israel, Singapore
Mr. Erik Aas
Mr. Johan Buse
Mr. Mohammed Muslim Khan
Tan Hoon Sang
Wahyudin Saptari Adikusumah
24 Stevens Close
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FIXED WIRELESS ACCESS
OPERATORS - KEY PLAYERS
/
CDMA
2000
1X
PT Telekomunikasi Indonesia, Tbk (CDMA Division – Flexi)
(http://www.telkomflexi.com)
Over the last four years Telkomflexi significantly upgraded and expanded their fixed wireless
network. In 2006, Telkomflexi entered into agreements with PT Samsung
Telecommunication Indonesia for the purchase of CDMA 2000-1X equipment and services in
Regional Division V; a purchase and installation agreement with a Samsung Consortium for
the expansion of the NSS, BSS and PDN FWA CDMA System Project in Division V (East
Java); agreements with a Huawei Consortium for the FWA CDMA expansion in Divisions I to
IV; and an agreement with a ZTE Consortium for the FWA CDMA expansion in Division VI
and VII.
In 2007, Telkomflexi continued to expand their capacity in all regions, entering into an
agreement with a Samsung Consortium for the deployment of FWA CDMA NSS, BSS and
PDN systems in Regional Division VII Bali and Nusa Tenggara, and with the ZTE Consortium
for the deployment of FWA CDMA NSS, BSS and PDN systems in Division VII, covering
Sulawesi, Maluku and Papua. Telkomflexi also completed the network migration of FWA
CDMA TELKOMFlexi from 1900 MHz to 800 MHz in Division II (Jakarta) and Division III
(West Java and Banten).
In 2008, Telkom Flexi again expanded its BTS network, developing 2,143 new base stations.
This expansion involved four major vendors: Huawei, Motorola, Samsung and ZTE. In
Division 1, Motorola developed 69 new base stations under the replace and redeployment
method, while Huawei built 326 new base stations. Huawei also developed 408 new BTS in
Division 2, 225 new BTS in Division 3 and 181 new BTS in Division 4. Meanwhile, Samsung
built 543 new BTS in Division 5, 63 in Division 4 and 39 in Division 7. In Division 6
(Kalimantan), ZTE built 140 new BTS and another 149 in Division 7. New BTS construction
contracts in 2008 accounted for only 1,140 of the total, with the remaining 47% (1003 base
stations) being a continuation of deployment contracts entered into in 2006 and 2007.
The Division of Fixed Wireless Network (DFWN) officially became an independent division in
2009. Now known as Division TELKOM Flexi (DTF), it will play a more comprehensive and
integrated role, handling everything from planning and development of products and
infrastructure, to sales and marketing and business development in a single division.
In 2009, DTF deployed 1,489 new BTS, delivering a total additional capacity of 7,505,439
lines. This brings the cumulative total of BTS as of the end of December 2009 to 5,543 BTS
with a total line capacity of 27,653,553.
In another significant development, we won Wi-MAX wireless broadband access 2.3 GHz
licenses in 2009 for five areas (Central Java, East Java, North Sulawesi, Maluku and North
Maluku, and Papua), complementing our existing licenses for 3.3 GHz wireless broadband
access in seven areas. In 2009, 3.3 GHz wireless broadband access was deployed in 31
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base stations and 460 subscriber stations and will be fully ready for service in September
2010.
Fixed Wireless Trends
The fixed wireless segment’s revenues have remain relatively stable, at Rp3,146.4 billion in
2007, Rp3,297.8 billion in 2008 and Rp3,336.0 billion in 2009. Within the fixed wireless
segment, wireless data and internet revenues have increased significantly, by 39.7% from
2008 to 2009, and 10.1% from 2007 to 2008. However, the fixed wireless segment results
has been declining, from Rp1,518.1 billion in 2007, to Rp1,203.4 billion in 2008 and
Rp279.4 billion in 2009. This decline has occurred despite a significant increase in
subscribers during such period, primarily due to lower average tariffs due to intense
competition and decline in fixed wireless voice revenues.
The fixed wireless telephone business is facing competition from an increasing number of
operators, including Indosat and PT Bakrie Telecom, as well as mobile cellular services,
SMS, VoIP services and e-mail. Competition in the fixed wireless markets has remained
intense, with each operator launching increasingly attractive and creative marketing
programs. In addition, the fixed wireless operations faces frequency bandwidth constraints
as there is currently no new frequency bandwidth available from the government for
expansion, and in densely populated areas, the current fixed wireless operations use
substantially all of the available frequency bandwidth that we have been allocated. As a
result, Telkomflexi face capacity issues for fixed wireless voice and data and internet
services in densely populated areas, which restricts the ability to compete in such areas.
However, Telkomflexi believe there are still opportunities in the market and, in particular,
Telkomflexi seek to further grow the fixed wireless data and internet revenues and extend
the network to cover new areas. Telkomflexi plan to continue to expand, though selectively,
the CDMA-based fixed wireless networks. Compared to fixed wireline networks, CDMAbased networks are generally faster and easier to construct and provide customers with
greater flexibility and mobility.
The fixed wireless network consists of Mobile Switching Centers (“MSC”) that are connected
to each other through trunk exchanges. Each MSC is also connected to a Base Station Sub
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System (“BSS”) made up of a Base Station Controller (“BSC”) and a Base Transceiver
Station (“BTS”). These, in turn, connect the handheld device and fixed wireless terminal at
the customer’s premises to the fixed wireless network.
The total number of fixed wireless lines in service increased from approximately 12.7 million
as of December 31, 2008 to approximately 15.1 million as of December 31, 2009.
The following table sets out statistics relating to the fixed wireless network since 20052009:
PT Mobile-8 Telecom (Fren)
(http://www.mobile-8.com)
PT Mobile-8 Telecom Tbk (Fren) was established in December 2002. In 2003, the Company
acquired two licensed mobile phone operators, namely Komselindo
and Metrosel, and started operating as a service provider based on CDMA technology. The
first service launched by Mobile-8 was the Mobile Prepaid Cellular Service, “Fren” in
December 2003 under CDMA 2000-1X network.
In April 2004, Mobile-8 launched the Fren Mobile Postpaid Service under the same network.
Five months later the Company acquired another licensed mobile phone operator, namely
Telesera.
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The Company also completed the transition of the telecommunications system previously
used by the three licensed operator from analog cellular system to a digital CDMA system.
In 2006, Mobile-8 has introduced 3G services on CDMA EVDO network, and has offered its
share to the public and became listed through an Initial Public Offering on the Indonesian
Stock Exchange (previously Jakarta Stock Exchange).
The company’s moved in raising capital continued in the capital markets, whereas in 2007,
Mobile-8 successfully issued Rupiah bonds for the frst time, which was also listed in the
Indonesia Stock Exchange. Then, the Company also entered the
regional capital market with its frst Eurobond that was listed in the Stock Exchange of
Singapore.
In April 2008, Mobile-8 has introduced a new feature called “World Passport”, in which the
Company became the frst CDMA operator in the world to join the GSM Association to enable
customers of Mobile-8 to around the world in both the CDMA mobile network and GSM
network.
After acquiring the Fixed Wireless Access (FWA) license in 2007, the Company launched the
FWA product in May 2008. By the end of 2009, the Company has FWA services in 13 major
cities in Indonesia.
In February 2009, Mobile-8 has launched new product called Mobile Data service for both
postpaid and prepaid. In May 2009, to fulfill the portfolio of the products, Mobile-8 has
launched FWA postpaid service. Moreover, to enhance the products advantage, in June
2009, Mobile-8 has launched Fren Duo, a hybrid service which
integrates both cellular and FWA services in one card that allows customers to register for
two services in a single chip.
Within seven years to year-end 2009, Mobile-8 has succeeded develop Cellular services,
Fixed Wireless Access services, and Mobile Data services. Currently, Mobile-8 network
covers the whole of Java, Bali, Batam, some areas of North Sumatera, South Sumatera and
Lampung, some areas of South and East Kalimantan, some areas of North and South
Sulawesi. As at year-end 2009, Mobile-8 has around 2.9 million subscribers for all Fren,
Hepi and Mobi and 42 M8-Center services in many cities to fulfll the needs of the
subscribers.
Mobile-8 Development
Thus in late 2009, which was also in line with improving economic conditions in Indonesia
and globally, Mobile-8 returned the focus on the business development of the Mobile-8
business. There were several encouraging developments that mobile-8 undertook during the
year, which not only enhanced the Mobile-8 brand in the market, but also positioned it more
strategically for future growth opportunities as the CDMA cellular service of choice.
One of these developments was the integration of the FWA and cellular services in a single
platform. This allows the customers to register for two separate telephone numbers (one
each for FWA and cellular connection) in a single chip/RUIM. Launched in June 2009, the
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service is branded as Fren Duo and received a good response from subscribers who quickly
recognized the benefts of having the FWA service in addition to the cellular service. Fren
Duo allows subscribers to enjoy the main beneft of FWA service of lower tariff and cellular
service of full mobility. As at year-end 2009, Fren Duo had been made available in 13 major
cities across Indonesia and we expect to expand the service to other cities in 2010.
On the data communication front, Mobile-8 continued to market the MOBI service
aggressively in cities and areas that are already covered by the EVDO network, even though
data services using the frst generation CDMA2000-1X are still available in the market. In
line with the growing Internet use in Indonesia, MOBI has become more popular among
users of Internet-linked smart phone devices in the country.
Also in 2009, Mobile-8 further developed the application for BREW to be used in a wideranging brand of handsets including Nokia, Motorola, Samsung, Haier and ZTE. The BREW
applications themselves were expanded to six categories comprising of b-Entertainment, bFun, b-Genius, b-SMSkatalog, b-Updated, and b-Woman.
In terms of network development, the Mobile-8 Next Generation Network continued to
evolve, and was the main focus of our network development in 2009. This next generation
network is a nationwide telecommunications network, using an Internet Protocol basis,
which will allow Mobile-8 to provide greater coverage with minimum investment. The
network will also enable Mobile-8 subscribers to make local long-distance calls at more
affordable rates.
Mobile-8 posted revenues of Rp537.4 billion in 2009, compared to Rp926.5 billion in 2008.
Earnings before Interest, Tax, Depreciation and Amortization (EBITDA) amounted to minus
Rp357.1 billion in 2009, compared to minus Rp83.8 billion in 2008.
As at year-end 2009, Mobile-8 has completed the construction of 1,458 Base Transceiver
Stations (BTS) and CDMA coverage repeaters, 55 Base Station Controllers (BSC) that
connects one BTS to another, 28 Mobile Switching Centers (MSC/WSS), nine Home Location
Registers (HLR) that serves as data bases for customer information fles, 19 Packet Data
Serving Nodes (PDSN) as gateways for mobile Internet data traffc, four SMS Centers that
handle SMS traffc; and other equipment that includes an Intelligent Network Billing System.
Looking forward to the year 2010, in an interesting development subsequent to year-end
2009, Mobile-8 has developed a strategic alliance with another cellular operator in Indonesia
to introduce a joint cellular service between those of Mobile-8’s FREN and Smart Telecom’
SMART.
Launched under the joint-brand of SMARTFREN in March 2010, the new cellular service will
combine the best of the two cellular operators, and create a new era of competition among
smaller cellular operators in Indonesia as a way to meet the challenges of market
competition from much larger competitors.
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Board of Directors :
Merza Fachys
President
Director
Anthony Chandra
Kartawiria
Director
Juliana Dotulong Lim
Director
Agus Heryanto Lukas
Director
Yopie Widjaja
Director
PT Bakrie Telecom, Tbk (Esia)
(http://www.bakrietelecom.com)
PT Bakrie Telecom Tbk. (BTEL) provides wireless communication services under the brand
Esia, Wifone, Wimode, Esiatel & SLI Hemat 009. The company utilizes CDMA 2000 1x
technology within the 800MHz frequency band, which resulted in a very clear voice service
and data transfer capability up to 153Kbps.
BTEL began its first operation in 1996 through its original Ratelindo service. Following its
relaunch in September 2004, BTEL has continually recorded positive operating as well as
financial performance.
In 2004, BTEL had only 192,000 customers. The company acquired its first one million
subscribers by 2Q06. By FY09, BTEL has surpassed the ten million subscribers mark. Bakrie
Telecom listed on the Jakarta Stock Exchange in February 2006 with the ticker symbol
BTEL.
Major Shareholders:
PT Bakrie Brothers Tbk. 49.81%
Public 50.19%
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Highlight :
Total subscribers increased from 7.3 million in FY08 to 10.6 million in FY09
Gross revenues increased from Rp 2,805.3 billion in FY08 to Rp 3,435.6 billion in
FY09
EBITDA increased from Rp 822.8 billion in FY08 to Rp 1,269.1 billion in FY09
Net income decreased from Rp 136.8 billion in FY08 to Rp 98.4 billion in FY09
PT Bakrie Telecom Tbk. (BTEL) posted a 22.5% increase in gross operating revenues to Rp
3,435.6 billion in FY09 from Rp 2,805.3 billion in FY08. This was mainly attributed to 24.5%
increase in telecommunication service revenues from Rp 2,503.9 billion to Rp 3,117.9
billion, driven by 45.2% increase in subscriber number from 7.3 million to 10.6 million.
Throughout 2009, the company also posted Rp 76.6 billion in net interconnection service
revenues, compared to Rp 17.1 billion in 2008. This was the result of more favorable mix
between incoming and outgoing traffic, inline with the increase in subscriber base.
Consequently, net revenues also increased by 24.5% to Rp 2,742.6 billion from Rp 2,202.3
billion.
Voice revenues increased by 14.3% yoy to Rp 2,081.9 billion from 1,822.1 billion.
However, non-voice revenues, such as SMS or VAS, data & internet experienced an even
higher growth at 71.1% and 48.7%, respectively. While voice remained the biggest
revenues contributor for BTEL, its proportion to gross revenues during the period have
actually declined from 65.0% to 60.6%. At the same time, non-voice contribution increased
from 20.2% to 26.9%. This was inline with the company’s aim to promote non-voice
revenues in order to reduce dependency from voice revenues.
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Subscribers
BTEL subscribers have reached 10,606,901 by the end FY09. This represent a 45.2%
increase yoy on the back of continuous innovation in both products and services, strong
brand positioning and improved network.
Prepaid subscribers increased by 46.1% to 10,515,715, mostly due to 47.4% growth in Esia
subscribers base to 10,382,840. Postpaid subscribers declined by 15.6% to 91,186 as more
Ratelindo subscribers converted into Esia or Wifone in order to take advantage of the
products’ higher tecnology as well as better features, while enjoying the financial flexibility
of prepaid services.
Service Usage
Total minutes of usage (MoU) throughout 2009 was 18.4 billion, which represent a 46%
increase from the previous year. The higher MoU was inline with the subscriber growth.
The Indonesian telco industry have been experiencing a declining average revenue per user
(ARPU) trend, especially following the intense tariff competition throughout 2008. While Esia
tariff remained flat during the period, the declining ARPU was mainly attributed to the much
higher proportion of on-net traffic, parallel with higher subscriber base. In addition, the
lower ARPU was also the result of expansion into a new area, where first time subscribers
have not recorded an optimum level of usage yet.
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In order to increase coverage areas as well as strengthen the existing network, BTEL has
installed an additional 209 BTS between October to December 2009. Total number of BTS
by the end FY09 stood at 3,677. This represent an annual increase of 905 BTS. The
percentage of BTS located in JBJB increased from 64% to 66%. In line with our assets light
strategy, 94% of the BTS were already co-located.
From October to December 2009, we have added coverage in three new cities located Java
& Kalimantan. This brought total coverage of 79 cities nationwide. These new cities are
Purwodadi (Central Java), Sangata (East Kalimantan) & Batulicin (South Kalimantan).
To maintain customer access to Esia services, BTEL has continued aggressively to broaden
its sales and distribution network by adding more Gerai Esia, dealers and outlets. By FY09,
BTEL’s distribution channels include 90 Gerai Esia, 202 dealers and 98,132 outlets across all
of our operating areas.
Board of Directors:
President Director
Deputy President Director
Deputy President Director
Director of Corporate Services
Director of Legal
Director of Finance
Economic Department
Embassy of Israel, Singapore
Mr.
Mr.
Mr.
Mr.
Mr.
Mr.
Anindya Bakrie
Erik Meijer
M. Danny Buldansyah
Rakhmat Junaidi
Juliandus A. Lumban Tobing
Jastiro Abi
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PT Smart Telecom
(http://www.smart-telecom.co.id)
PT Smart Telecom and PT Mobile-8 Telecom in March 2010 merged their rival brands to
become SmartFren, in a bid to cut costs and survive the tough competition in the industry.
The two CDMA operators said they would save money by sharing the same shops and
distribution network and carrying out joint marketing campaigns.
The companies said they hoped the tie-up would help them double their subscriber base this
year. At of the end of year 2009, Smart had 2.5 million subscribers, while Mobile-8, which
operates under the Fren brand, had about 3 million subscribers.
Smart, which is owned by PT Sinar Mas, entered the business two years ago and is still
struggling to capture customers and revenue in a highly competitive industry dominated by
the three GSM-based operators: PT Telkomsel, PT Indosat and PT XL Axiata.
Smart was still in the red at the end of 2009, and Mobile-8 has suffered losses since 2007.
In the third quarter of 2009 the company booked a net loss of Rp 439.95 billion ($47.5
million) because of falling revenue and rising operating costs. The company’s outstanding
debts as of the third quarter of 2009 were Rp 4.93 trillion.
Some analysts have argued that it is inevitable that some of the smaller players among the
11 mobile phone service providers would be forced to merge because of the cut-throat
competition in the industry.
Sinar Mas had previously planned to acquire a controlling stake in Mobile-8 after purchasing
5 percent. However, Sinar Mas, through subsidiary PT Gerbangmas Tunggal Sejahtera,
recently reduced its stake to 3 percent.
Board of Directors:
President Director
Director
Director
Director of Corporate Services
Economic Department
Embassy of Israel, Singapore
Mr.
Mr.
Mr.
Mr.
Sutikna Wijaya
Ubaidilah Fatah
Charles Sitorus
Djoko Tata Ibrahim
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PT Indosat Tbk (CDMA Division – StarOne)
(http://www.indosat.com)
On December 15, 2006, Indosat has accepted 2 channels no. 589 and 630 on its 800 MHz
frequency band to operate Local Wireless Fixed Telecommunication Network in Jabotabek
area. Following the approval of these 2 channels, Indosat will continue to expense local
wireless fixed telecommunication services in Jabotabek area and continue to develop cellular
services throughout Indonesia.
Telecommunications firm PT Indonesian Satellite Corporation (Indosat) expects the revenue
from its newest service -- the fixed-wireless phone StarOne -- to be able to compensate
possible losses in its direct international dial service.
StarOne is a data and voice telecommunication service with a limited mobility for a certain
code area. This service is using the fixed wireless technology called CDMA (Code Division
Multiple Access) 2000 1X which is the digital cellular system developed for the future
telecommunication. This technology offers many more advantage such as the quality of
voice which is more clear, providing the security system or privacy from tapping and
duplication, and is good for health because the wave radiation caused is relatively low
compared to other wireless technology.
StarOne is available of prepaid and postpaid. Postpaid StarOne offers several advantages
such as economical SMS tariff to StarOne, Matrix, Mentari and IM3 with a Rp 100 rate per
SMS, DLD tariff using 011 access code between StarOne users (Jakata to/from Surabaya)
Rp 900/minute. Besides that, Postpaid StarOne offers a Rp 97.5 rate per minute for calls
made to PSTN. While prepaid StarOne offers the sms tariff to StarOne, Matrix, Mentari and
IM3 with a Rp 150 rate per SMS. In addition to that, local calls to cellular destination costs
at Rp 750 per minute. For DLD calls using the 011 access code from StarOne costs at Rp
1,000/minute.
Indosat, previously the only player in the international call sector, is likely to experience
declining profit in the business after rival PT Telekomunikasi Indonesia (Telkom) launched
its international call service last month. Telkom's target is to win 25 percent of market
share.
The international call service accounted for 22 percent of Indosat's total revenue in 2003,
while the cellular service contributed 62.1 percent. The remainder came from multimedia
and other services.
With the capacity to serve 700,000 subscribers, Wahyu said in the medium term Indosat
planned to sign up 350,000 StarOne subscribers in Jakarta and Surabaya, East Java.
Indosat first launched StarOne in Surabaya and surrounding areas Malang and Pasuruan in
May. The company said it now had about 4,000 subscribers there. The launch of StarOne
was part of efforts to boost the number of people with access to fixed telephones in the
country, which currently stood at around 9.5 million out of 215 million people nationwide.
StarOne is a fixed-wireless service that allows cellular mobility within a designated area but
with a much lower tariffs. The service enables users to make long-distance and international
calls and send short messages to other Indosat cellular lines (Mentari, IM3, and Matrix).
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59
It also allows users to have access to internet at the speed of 153.6 kilobytes per second
(kbps). StarOne will compete with three other fixed-wireless systems in the market. They
are Telkom Flexi (by Telkom), Esia and Mandara.
PT Sampoerna Telekomunikasi Indonesia (Ceria)
(http://www.ceriaku.com)
Sampoerna Telekomunikasi Indonesia (STI) was one of telecommunication companies in
Indonesia, which is a subsidiaries of Sampoerna Strategic Group. STI starting in
telecommunication business in 1995, under the name PT Mobile Seluler Indonesia (Mobisel),
and change into STI, after acquisition from Sampoerna Strategic to become the majority
shareholders. STI with CDMA 2000 1x and 450 MHz frequency allocation, on March 2006
start to lauch their new brand products and services called Ceria.
Right now, STI cover Jambi, Riau, South Sumatra, Lampung, Central Java, Jogjakarta, East
Java, Bali and Lombok area. STI claimed have around 1 Million subscribers at the end
2008.
Not much data about STI, since there’s not much expansion and marketing campaign from
STI.
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INTERNET SERVICE PROVIDERS – KEY PLAYERS
PT Telekomunikasi Indonesia, Tbk (Data, Internet and Information
Technology Services)
(http://www.telkom.net.id)
Telkom began operating data network services in 1997 and continue to develop and expand
our network. As of December 31, 2008, Telkom IP-based network covered 362 locations
with 801 router nodes nationwide. Telkom will continue to improve the speed and quality of
Telkom IP-based network. Telkom IP-based network serves as the transport network for
high quality VPNs, VoIP, and dialup and broadband internet services. Telkom have remote
access servers (“RAS”) in 127 locations with 183 nodes nationwide used for our
“TELKOMNet Instan” dial-up internet services and corporate dial-up internet services.
Telkom premium prepaid dial-up internet access service, TELKOMNet Instan, is available in
all cities in Indonesia. A total of 1.5 billion TELKOMNet Instan minutes were utilized in 2009
by approximately 448 thousand telephone subscribers. The number of subscribers
decreased by 22.0% from the prior year.
TELKOM also provides broadband internet service that runs on existing copper access and
use ADSL technology (known as TelkomSpeedy). As of December 31, 2009, we had
approximately 1,145 thousand broadband internet access subscribers, an increase of 77.5%
over the prior year.
VoIP is a low-cost service for international phone calls. “TELKOMGlobal-01017” is our
premium VoIP international calling service, while the standard VoIP international calling
service is known as “TELKOMSave”. Both services are accessed by dialing a special
international prefix. Having entered into agreements with eight global carriers (four for
outgoing, one for incoming and three for both incoming and outgoing calls), we provide
worldwide access for subscribers. All the global carriers are wholesalers that allow us access
to their international networks.
A total of 275.9 million outgoing (using TELKOMSave or TELKOMGlobal-01017) and
incoming (from TELKOM’s global partners) VoIP minutes were called during 2009. This
represents an increase of 43.2 million, 18.6%, in VoIP minutes called compared to 2008.
Although incoming VoIP minutes called fell 68.9% from 63.0 million minutes in 2008 to 19.6
million minutes in 2009, outgoing VoIP minutes called grew 51.0% from 169.7 million
minutes in 2008 to 256.3 million minutes in 2009.
Data, Internet and Information Technology Services Development
Telkom continued to improve the quality of their data network in 2009. Telkom expanded
the coverage and capacity of their existing IP core through the implementation of IP over
Lambda 10 Gbps based and the Telkom Tera Router Core in three cities and six nodes
(Jakarta, Batam and Surabaya) and an additional three internet gateway nodes. The tera
router has been in operation since March 2009.
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In support of the Next Generation Network (NGN) program, Telkom enhanced the IP core
network to enable them to deliver triple play services and service convergence, and to
integrate the NGN core network between the fixed and fixed wireless business. The IP core
development consisted of the implementation of a single platform tera-byte router with fully
redundant network architecture.
Telkom existing IP core network consists of 22 core router nodes, 601 PE routers, 156
10GE, 702 GE ports, 284 STM-1, 143 STM-4 and 37 STM-16. Telkom regional IP network
was expanded in 2009 with the completion of 130 new nodes for the nationwide Metro
Ethernet Network (located at exchange nodes) to add to the 767 nodes developed for the
Metro network in 2008. This delivers a total of 897 Metro Ethernet nodes that are ready to
support the bandwidth requirements of the broadband services nationwide.
Metro Ethernet is also being utilized as the main IP transport for IP DSLAM, MSAN for
Speedy Broadband, Softswitch, and IP VPN as well as GPON for mobile backhaul, enterprise
business solutions and Triple Play services for selected customers. In 2009, TELKOM used
its Metro Ethernet network as the mobile backhaul for more than 900 Node Bs belonging to
our cellular subsidiary, Telkomsel, in support of mobile broadband penetration. This network
synergy is expected to continue to provide 4,000 Node Bs in 2010.
By the end of December 2009, TELKOM had successfully deployed an additional 400,408
broadband access ports (IP DSLAM) for TELKOM Speedy. This brings the cumulative
capacity to 2,350,257 ports, which will provide full support for the rapid expansion of fixed
broadband penetration through TELKOM Speedy. In addition, the ongoing development of
303,812 ports from MSAN broadband in 2009 will be ready for service in June 2010.
By the end of December 2009, Telkom had expanded the internet gateway capacity to
30.025 Gbps. This will ensure adequate capacity international links to anticipate for high
broadband traffic growth for both fixed and mobile broadband.
Increase in Data, Internet and Information Technology Services Revenues
Data, internet and information technology services revenues accounted for approximately
28.6% of the consolidated operating revenues for the year ended December 31, 2009,
compared to 24.2% for the year ended December 31, 2008 and 24.7% for the year ended
December 31, 2007. Telkom revenues from data, internet and information technology
services increased by 25.8% from 2008 to 2009 and increased by 0.2% from 2007 to 2008.
The increase in data, internet and information technology revenues in 2009 was primarily
due to a 8.8% increase in revenues generated from SMS services and a 60.8% increase in
revenues from internet, data communication and information technology services
particularly DSL and mobile broadband services. As part of the transformation into a TIME
business, and Telkom corporate objective of growing the new wave businesses, Telkom seek
to continue to increase such revenues.
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PT Indosat Mega Media (IM2)
(http://www.indosatm2.com)
INDOSATM2 is the Internet, Multimedia and other IP based Services Provider. Those kind of
services such as: High Speed / Dedicated Internet, Dial up Internet, TV Cable, VPN (Virtual
Private Network), Hosting and Collocation, VoIP ( Voice over Internet Protocol), B2B and
B2C E-Commerce.
IndosatM2 is fully subsidiary company of PT. Indosat ( The Telecommunication Service
Provider in Indonesia), starting to operate at year 2000 and giving the services for
company, organization and personal / residential in Indonesia, supported by a highest
capacity network which was connected to the Global Internet.
IM2 gives business solution with Internet Dedicated Diamond services. This service is
attributed for corporate customers which need 24 hours internet access with flexible
configuration.
Additional features which owned by this service are international internet access that suits
customer subscription bandwidth, and also domestic peering IIX's internet access with
sharing bandwith condition. With that condition, domestic internet access will automatically
reduce bandwidth that goes to international access, but domestic internet access can be
managed to customer needs.
IM2 Broadband 3.5G with its wide coverage area gives you a comfortable internet
connection up to 3.6Mbps to compliment your mobile lifestyle. Enjoy your internet
experience using the easy to configure HSDPA Modem Router and you can share the
connection to your friends or colleagues within your Local Area Network (LAN), either with
cable or WiFi.
IM2 IndosatNet Metro Internet are service Broadband Internet and IP VPN 24 hours at POP
Building location (Point of Presence) IM2 who plays along with IM2'S partner, where quality
access will get more secure since most actually IM2'S network that is equal to. In store in
various package, beginning from 256 kbps until 10 Mbps, so it gets to be adjusted by your
requirement.
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Metro Internet as solution in point for Triple Play's service (Voice, Video and Data) at the
price that so competitive.
Metro Internet defined as bundling's Package local accesses and internet's port divides
customer that its location lies deep building which most service by Ethernet Biznet's Metros
at Jakarta city. And this package gives overbooking factor 1:2 for internet connection (INP)
and 1:1 for IIX'S connection. This package also gives additional services as 4 line ports
PSTN Phone (Indosat Phone)
With Metro Internet service, access that goes to international internet port will pass through
Fiber Optic network with Sharing Bandwidth's conditions ratio 1: 2. Another criterion is
access to go to Domestic Peering IIX (Indonesia Internet Xchange) with sharing bandwidth
until with 1 Gbps and using Routing Protocol: Static Default Route (non BGP) follow to IM2
With Metro Internet Service , customer will get facilities such as 2 email address with
Mailbox's capacity 100 Mb, QoS Availability, 5 (five) Effective IP Address, Router CPE (to
manage QoS) and Gateway's Media (VoIP Gateway) with 4 port those are loaned / rent to
customer, if customer wants to subscribe I Phone.
IM2 also have some new products trends in 2009-2010 such as :
-
-
-
IM2 Broadband via3.5G with wide coverage area gives you a comfortable internet
connection up to 3.6Mbps to compliment your mobile lifestyle. Enjoy your internet
experience using the easy to configure PCMCIA or USB modem. With Multiple Access
feature you can access the cyber world not only through 3.5G network but also
CDMA, Hotspot and Dial Up.
IM2 Pay TV provides up to 50 leading channels from local as well as international
stations which are divided into 4 group packages: Education, General Entertainment,
News & Business and Sport.
i-memova is a value added services with Push Mail technology that allows you to
recieve and send email through your mobile device. This technology is implemented
on the the Indosat GSM network, and for the time being, can only be used by
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Mentari & Matrix subscribers (prefix 0815 and 0816). The email is sent in MMS, with
a maximum capacity of 50 KB per MMS.
Board of Directors :
President Director
Operational Director
Marketing & Sales Director
Planning & Development Director
Finance & Administration Director
Mr.
Mr.
Mr.
Mr.
Mr.
Indar Atmanto
Imron R. Harun
Abu Syukur Nasution
Muhammad Amin
Hulman Sidjabat
PT Dyviacom Intrabumi, Tbk
(http://www.dnet.net.id)
PT Dyviacom Intrabumi (hereinafter referred to as Dyviacom) was established on November
16, 1995 based on Articles of Incorporation No. 107 drawn up in the presence of Siti Pertiwi
Henny SH, Notary in Jakarta. Nearly one year after the establishment date, Dyviacom
applied for its principal and operational licences. Then immediately proceed with the
preparation of its human resources, being assisted by OMNES Services as the consultant. In
September 1996, Dyviacom officially became one of the players in the field of Internet
Service Provider (ISP) with the brand name of D~Net.
Offering the fastest Internet access in Indonesia, four times faster than the existing services
provided by other ISPs, marked the beginning of Dyviacom. The Internet Backbone built by
Dyviacom was supported by a direct link using fiber optic and satellite connection to The
United States. All the computer system and network was especially designed] by OMNES to
anticipate the exponential growth of Internet users
and to accommodate the expansion of Dyviacom. A well-planned network system and
resilient infrastructure were necessary to support Dyviacom's main focus of encouraging the
interest of Internet users in Indonesia and to enhance the Small Medium Enterprise's
(SME's) to utilize the Internet technology in their business.
In January 1997, Dyviacom focused its attention to develop the youth market. Experiences
had shown that young people reacted positively toward new technology invention. They
were the ones who applied technology as part of their modern 'life style'. Therefore to
further encourage the use of Internet and to increase the popularity of Dyviacom, this
company then launched a youth portal called Diffy.Com. The outcome of Diffy.Com was
quite overwhelming. There were many exciting programs for young netters found in this
portal, such as, on-line chatting, consultation, shopping, celebrities news, also spiritual
development. The highlight of Diffy's existence was at the end of the year 2000, when
MarkPlus & Co in the 12BC Awards 2000 nominated this portal as the best portal.
At the end of the year 2000, Dyviacom surprised the IT industry in Indonesia again by
successfully enlisting its shares at The Jakarta Stock Exchange as the first IT Company
going public. For Dyviacom it was a calculated step to become a public company since this
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company was preparing itself to enter projects with foreign partners as well as to expand it
into rural areas. In regard to projects with foreign partners, Dyviacom had succeeded
signing contract with multinational companies residing in Indonesia to develop IT solution.
Throughout the years 2001-2003, Dyviacom continued to expand its business in the area of
application development and IT Solution for retail and corporate clients, products such as
VOIP (Voice over Internet Protocol) and franchise were promoted. In year 2005 the shifting
from retail into corporate area its becoming apparent, company involves in wireless, fibre
optic, Internet Ready Port, Virtual Private Network (VPN) and other infrastructure base on IP
or Open Source.
During the years 2006-2007, corporate internet services increased sharply in line with the
increase in infrastructure services of the company by using local access as well as
infrastructure with fiber optic, leading to the increase in bandwidth performance, either in
speed or in reliability. The year 2007 has been a year that brought substantial progress in
the performance of the company, with the entrance of PT. Philadel Terra Lestari which
brought a positive impact in the rise of DNET share price, namely from around Rp. 100
increasing up to Rp. 600 at the beginning of the fourth quarter of the year 2007. While
during the first quarter of the year 2007, the company has realized its strategic plan,
namely by sending its professional personnel to the APRICOT (Asia Pacific Regional
Conference on Operational Technology) workshop with international certification, which was
held in Bali in the month of February, 2007. And in 2007 the company started to move
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toward IPV- 6 Ready (Internet Protocol Version 6), and in 2007 also the connection to IPV-6
Global network has been realized. With this IPV-6 connection, the company has evidently
been more and more ready to face the technological dynamics that are to occur. During the
year 2008 the Company continued to focus its efforts on corporate internet service. The
company also ketp upgrading the expertise og its professionals, namely by sending its
engineers to attend the APRICOT ( Asia Pasific Regional Conference on Operational
Tachnology) which was held in New Zeland. This has also been performed in the effort to
realize the Company Strategic Plan and to show preparedness of the Company in facing
global competition.
Board of Directors :
President Director
Operational Director
Ms. Sylvia W. Sumarlin
Taufik Aldjuffry
PT Firstmedia, Tbk
(http://www.firstmedia.com)
PT Firstmedia, Tbk (formerly PT Broadband Multimedia, Tbk) was established on January
1994. On September 2001, the company obtained operating network for fixed-local Packet
Switch License from the Minister of Transportation. On September 2004, the company
obtained operating pay television service license.
Firstmedia also known before as kabelvision, become a triple play provider, with giving TV
cable services and Internet and Data communication Services. Firstmedia also challenge
Telkom Speedy (ADSL) with a very cheap internet connection with fast internet broadband
connection, called FastNet. The Price starting from Rp 99.000,00 per month for Internet
Bandwidth up to 384 Kbps.
Operating Revenue per 30 June 2009
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Subscribers Per 30 June 2009
Board of Directors :
PT Supra Primatama Nusantara (Biznetworks)
(http://www.biz.net.id)
Biznet is one of the leading Internet and Network Provider in Indonesia delivering Metro
Ethernet and Metro FTTH (Fiber To The Home) services, Internet related services and Data
Center facilities that works with businesses whose daily operations rely on premium
connectivity with Fiber Optic network access, disaster recovery facility and managed
services for mission critical operations.
Biznet Networks offers full spectrum of Internet related services that businesses demand, at
a competitive price such as: Network, Internet, Hosting and Voice services. Our Customer
Care and Network Operation Center are available 24 x 365 to ensure the network is
available at peak performance at all time. You can reach via phone, email or live chat.
Biznet Metro Fiber Optic Network and Internet Network are continually monitored to ensure
that network links never become oversubscribed, which leads to poor end-user
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performance. Once a minimum threshold is reached, more bandwidth is added to secure
your level of service.
Biznet Networks is a technology company, with commitment to keep on innovating our
products and services and investing on the latest technology to enhance services and
network coverage delivered to our customers. This commitment is supported by the best
Engineering Team, mostly graduated from leading universities in Indonesia and abroad. In
2006, Biznet Engineering Labs has released Biznet Metro - The First Carrier Grade
Metro Ethernet Network in Indonesia. In 2007, Biznet Engineering Labs has launched
Biznet Metro FTTH, a first Fiber To The Home (FTTH) network in South East Asia. In 2008,
Biznet Engineering Labs has launched Biznet InterCity Network, an inter-city network
connecting major cities in Indonesia.
Biznet Networks are connected directly to multiple Tier-1 backbone and leading Internet
Exchanges in the world to deliver the fastest and shortest route to the network destination.
Biznet also has direct peering agreement with several leading content providers in the
world.
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Biznet owns and maintains thousands of kilometer fiber optic conduit and cable around
Jakarta, Bali, Bandung and Surabaya area. Biznet also owns and operated Biznet InterCity
Network which connects major cities in Java Island. Biznet uses several networking
technology such as Metro Ethernet, GE-PON (Gigabit Ethernet Passive Optical Network), NGSDH (Next Generation - Synchronous Digital Hierarchy) and MPLS (Multi Protocol Layer
Switching). Biznet also operates International POPs located in Hong Kong, London - UK, Palo
Alto - USA, Seoul - South Korea, Singapore, Tokyo - Japan and connected to major Internet
Exchanges in the world.
Board of Directors :
President Director
Director
Director
Economic Department
Embassy of Israel, Singapore
Mr. Adi Kusma
Mr. Kristian Kawiran
Mr. Husin Suhaidi
24 Stevens Close
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BROADBAND WIRELESS ACCESS (WIMAX)
BWA Regulation
Broadband Wireless Access development in Indonesia, beginning with the Government
Regulation by the Minister of Communication and Information No. 8 and No. 9 in January
2009 ago, which set the radio frequency allocation for Broadband Wireless Access in the 2.3
GHz and 3.3 GHz.
Regulation is set on some administrative and technical specifications that are to be used in
carrying out the BWA services, including:

For the frequency of 2.3 GHz, allocated in the frequency range from 2300 MHz to
2400 MHz.In the frequency range, and is divided into 15 blocks channel numbering
as follows:

For the frequency of 3.3 GHz, allocated in the frequency range from 3300 MHz to
3400 MHz. In the frequency range, and is divided into 8 blocks channel numbering
as follows:
Block Channel No.
1
2
3
4
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Frequency Range (MHz)
3300 – 3312.5
3312.5 – 3325
3325 – 3337.5
3337.5 - 3350
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5
6
7
8
3350 – 3362.5
3362.5 – 3375
3375 – 3387.5
3387.5 - 3400

Broadband Wireless Access technology is using Time Division Duplexing (TDD).

Broadband Wireless Access is using 802.16d standard that is portable or nomadic.

BWA service is divided into 15 areas of the zone consists of:

For frequency allocation of 2.3 GHz, there is no user existing in the frequency, so for
that, the government will conduct the auction to the telecommunication companies in
Indonesia. This auction process is also a pilot project providing Broadband Wireless
Access, with just allocated a frequency channel on the block 13 (2360 - 2375 MHz)
and the block channel 14 (2375 - 2390 MHz) only.

The government automatically allocate channel block 15 (2390 - 2400 MHz) for the
Universal Service obligation (USO). USO tender winners can use the channel block
for the purpose of USO Services only.

For frequency allocation of 3.3 GHz, for existing wireless broadband provider in the
frequency allocations, adjustments will be made, in accordance with the blocks that
are available, and wireless broadband provider for the allocation of the frequency
3.4 GHz to 3.6 GHz will be migrate into frequency of 3.3 GHz that are available.

Broadband Wireless Access license will be provided and valid for 10 (ten) years, and
can be extended for the next 10 (ten) years, and so on. Once every 1 (one) year will
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be made to review the development of infrastructure and services that have been
installed.

Each device and the equipment that is used for Broadband Wireless Access, must be
through a certification test and have been passed the test.
Tender and E-Auction Process for Frequency Alocation of 2,3 GHz
In April 2009, the government began to open registration for the auction to the companies
that will be providing Wireless Broadband Access in the 2.3 GHz frequency allocation, on the
block 13 and block 14. In the beginning of the registration process is followed by more than
30 participants consisting of Telecommunication Operators, The Internet Service Provider
(ISP) Consortium, and other telecommunications companies.
After several selection processes from 22 to 26 June 2009, then on 29 June 2009
announced 21 companies that passed the selection process, namely:
All the 21 companies at the end, attend the E-Auction process that took place on 16 July
2009, which eventually won by the companies by the following:
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The first winner will be given first opportunity to meet the specified requirements, including
costs that have been agreed at the time of auction. When the first can’t meet these
requirements, the second will automatically replace the position of the first.
Other Issues
PT Telekomunikasi Indonesia, Tbk (Telkom) welcomed positive results of the auction and
the process of the Broadband Wireless Access auction (BWA) that was carried out by the
Government, on 16 July 2009. As results of the process of this BWA tender, Telkom
currently had the BWA licenses for 12 zones (7 licenses 3.3 GHz and 5 licenses 2.3 GHz)
without overlap from 15 zones in Indonesia.
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The government in the near future also would immediately regulate the allocating of the
frequency 2 GHz (2053 - 2083 MHz) and the frequency 5,8 GHz (5725 - 5825 MHz) for the
Broadband Wireless Access service.
There’s no objection from participants in the auction during the objection period
that ended on June 22 2009, and all the participant apparently could accept results of the
Broadband Wireless Access auction. The price size from results of this auction of achieving 9
fold times (more than Rp. 450 Billion) from the foundation price of the auction that earlier
only of Rp. 53.5 Billion.
Local Content on BWA Equipment
Legal foundation of domestic utilization on telecommunication sector are :
 MoCI decree No. 7/PER/M.KOMINFO/2/2006 regarding utilization of radio frequency
band
 MoCI decree No. 32/PER/M.KOMINFO/10/2008 regarding Universal Service
Obligation
 Indonesia Government Regulation No. 7 year 2009 regarding variety and rate of
national income other than taxes (PNBP) which is valid in Communication and
Informatics Ministry.
From all the regulation above, some policies about Domestic Utilization (Local Content) for
Broadband Wireless Access Equipment are :
1. Communication devices/equipment for wireless broadband using radio frequency
band of 2,3 GHz and 3,3 GHz must have at least 30% local Content for Subscriber
Station (SS) and 40% for Base Station (BS). Gradually, communication
devices/equipment for wireless broadband as mention in point 1 must have at least
50% Local Content in 5 years period.
2. Domestic and Foreign Component classified by :
 Human Resources by Nationality
 Working Equipment by Ownership
 Material by Country Origin
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INDONESIA TELECOM’S MARKET:
CURRENT TRENDS AND DOING
INDONESIA
BUSINESS
IN
Indonesia Telecom’s Market Trends
As world telecom’s market trends move forward with the new technologies and services,
Indonesia will follow a little bit similar with world trends.
For Fixed Line Products and Services, market trends will be change into Fixed Wireless
Access services, that can give more mobility and reasonable price. The technology for
copper-wire also will change into a superhighway infrastructure network, with Metro
Ethernet and Fiber Optic Connection, to the Building (FTTB), Residential (FTTH), and others
(FTTx).
For Cellular Services, enrichment the Mobile Content and Application will be the trends for
Cellular Business. Data Communication over Cellular Networks also will growth based on
content that it will be delivered, such as Mobile TV, Mobile Ads, Mobile Application such as
Voice Streaming, Multimedia Streaming, Games, and others.
Blackberry services also will be grow significantly based on the development of Blackberry
Application Solution. Push Mail, Push to Talk, Video Mail, Blackberry Messaging will be the
trends for the next couple of years.
For Service Providers and Data Communication Services, WiMax and IPTV will be the
trends for the future. Step by step, the Data Communication network, will be converged by
Mobile network, and it will come to the Next Generation Network or Converged Network.
For the Internet Content, Social Networking, it will be the leader for Indonesian Internet
Market trends. Booming Friendster.com in school and college society for the last couple of
years ago, placing Indonesia to be the 3rd position of Friendster Subscribers account in the
world. And by seeing the trends at the end of year 2008, the social networking move to
Facebook.com, and again put Indonesia as the largest community that using Facebook.
Application support at social networking that working on mobile handheld, such mobile
phone or PDA, including blackberry with push mail and messenger features, will continuing
social networks to be no. 1 Internet trends in Indonesia. At Q2 year 2009, social network
already been the second position of Indonesia top 100 sites after file respository, that
starting to be less percentages for a couple of years ago.
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Source : Alexa.com
Blogging trends in year 2010 will have a slightly change, especially in the quality of
contents. In the first era of Blogging in Indonesia, had been dominated by technical
contents, especially in ICT sectors, but then it slightly change to be citizen journalism, Blog
yang di era awal kemunculan banyak didominasi konten teknis di bidang komputer, seperti
kita ketahui kemudian bergeser ke jurnalisme warga (citizen journalism). There’s some
blogs that also but somekind of Internet Advertising and Multilevel marketing.
With full support from payment gateway, such paypal.com, that give the possibilities to
make a transaction with Indonesian Banks starting in year 2008, will also boosting Internet
Business trends in Indonesia. By using payment gateway, it will make it easy and faster for
e-commerce transaction, by using credit card from the local bank.
Some possibilities also will still put Search Engine Optimization (SEO) and File
Repository (allocating e-book, music, video, etc) as Internet Trends in Indonesia for the
next couple of years.
Partnerships in Indonesia’s Telecoms Industry
Interviews with telcos and system integrators reveal that for major capital expenditures and
infrastructure projects, contracts are awarded through competitive open tenders. However
where the capital expenditure is for network expansions and additional works, Indonesia’s
telcos generally will select the original supplier to carry out the additional work.
Industry sources note that Indonesia’s mobile telcos relies on foreign technology for its
infrastructure. Companies like Ericsson, Nokia and Nortel Solutions are among some of the
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companies’ active in providing network technology for Indonesia’s telcos. These companies
then partner local companies who will provide the on-the-ground system integration and
support. In some cases, mobile telcos maintain long term service agreement with local
system integrators and companies. Major foreign telecom equipment providers such as
Ericsson and Nokia maintain a local presence in Indonesia.
For new telecom equipment or application providers/principal that would like to have a
partnership with the telecom companies in Indonesia, must follow the alternatives below :
1. Have an engagement with the local System Integrator as their agent that already
have a connection to telecom operator in Indonesia. Even though the agent already
have a connection with Telecom operator, but mostly of them have to make a
persuasive follow up starting from the lowest managerial level to the decision maker
level, which mostly a VP and GM level. If the telecom operator interest with your
products, you will need to have a trial for compatibility and reliability of products and
services. Price also one of the terms for the telecom operator to make a decision.
2. Have an engagement with local System Integrator as their agent that have a
connection with original and major supplier to the Telecom Operator, such as
Ericsson, Nortel, Nokia, etc. The principal will be place as sub contractor from the
major contractor. All the negotiation must be made at the first time engagement
with the Major Supplier, price, project management, etc. After that, the process to
the telecom operator will be lead by major Supplier.
The principals must be aware, mostly that each managerial level in telecom companies,
have their own system integrators and some of them also have their own ‘special’
principals. There’ll be so many challenge and obstacles until the principal can proving their
products and services is the best amongs them.
Telecoms contracts are awarded by Indonesia’s telcos in two ways. The traditional method
of awarding contracts is through competitive open tender. Increasingly though, e-auctions
are also being carried out for less technical contracts.
Evaluation Processes in Indonesia’s Telecom Market
Telecoms contracts are awarded by Indonesia’s telcos in two ways. The traditional method
of awarding contracts is through competitive open tender. Increasingly though, e-auctions
are also being carried out for less technical contracts.
Open Tenders
Depending on the scope of work required, Indonesia’s telcos may put out an international or
domestic competitive open tender. The tender process begins with telcos issuing a Request
for Quotation (“RFQ”) and inviting interested parties to submit their bids. Telkom is known
to be one of the most active RFQ issuers as it is the largest telco. We also note that Telkom
has the larget capex spending and planned future spending.
Tenders for network infrastructure tend to be international. Indonesia’s domestic telecoms
technology does not have the capability or expertise to build complete network
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infrastructure on its own. International bidders such as Ericsson, Siemens and Nokia may at
times select local companies to form part of the bidding consortium. It is also common that
the winning bidders work with local companies in service delivery.
In our conversations with several telco infrastructure and VAS providers, We find that
quality and price appear to be the winning combination. Johnson Communications, a
provider of Outside Plant (“OSP”) infrastructure integration, shares that Indonesia’s telcos
will normally pick the bid that meets the quality and specifications of the RFQ. The lowest
bid may not always be the winner. Some telcos also have a practice of short-listing the
three best bids and invite them to further bid through e-auction for the contract.
Closed Tenders
Actually there’s no closed tender term and condition when you would like to have a project
from the telecom companies. Actually the process is more like the same as Open tenders.
The different is the closed tenders only been allocated by telecom companies just to several
prospect contractors/suppliers/providers that already passed several process with the
telecom companies that meet their requirements and compatibilities. Telecom operators will
invite the principals personally and directly to join the closed tenders and find out the
winner of the project.
But sometimes, the closed tender also already been arrange to winning the project for the
one and only principal that meet their interest and requirements. So the tender actually just
for the formal process after all.
E-auction
E-auction is relatively new in Indonesia but is said to be growing in acceptance. GoI, in its
effort to streamline procurement and tackle corruption had introduced e-procurement and
e-auction systems in 2004. This has also paved the way for several Indonesian state-owned
companies to implement such measures. Telkom has implemented e-auctions and eprocurement as part of its corporate governance measures.
Telkom’s e-procurement/e-auction system includes vendor management modules that allow
the company to release RFQs and standard documents efficiently to all bidders and vendors.
In the case where the bidders have been previously short-listed in the above direct tender,
the system then allows short-listed vendor to further bid for the contracts. XL have not been
able to determine how widespread the use of e-auctions in Indonesia’s telcos is. Industry
opinion however suggests that e-auction and e-procurement are used for non-technical,
repetitive or lower values contracts.
Major telcos in Indonesia are also known to diversify their supplier base. Indonesia is home
to many VAS and system integration companies, both big and small. Telcos prefer to work
with different VAS and system integrators to avoid over-reliance on one single supplier.
Another consideration is the strength of local knowledge of the particular supplier. Given
that Indonesia is a polygot of islands and different ethnicities, knowledge of each particular
region’s quirks are very important.
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