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2009/TEL39/LSG/RR/006rev3 Agenda Item: 2

Policy and Regulatory towards NGN in Indonesia

Submitted by: Indonesia

Regulatory Round Table - Facilitating Next Generation Network Development: Policy and

Regulatory Priorities for a Vibrant ICT Environment

Singapore 15 April 2009

KOESMARIHATI

SPECIAL ADVISOR TO THE DIRECTOR GENERAL OF POST AND TELECOMMUNICATIONS

MINISTRY OF COMMUNICATIONS AND INFORMATION TECHNOLOGY

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POLICY AND REGULATORYPOLICY AND REGULATORYAPPROACHED TOWARDS NGNAPPROACHED TOWARDS NGN

in INDONESIAin INDONESIA

Presented At REGULATORY ROUNDTABLE ,

APECTEL39Singapore, 15 April 2009

Vision & Mission of MCITVision & Mission of MCIT2

”To make information and communication development effective and efficient to bring prosperous information society on the frame of the Republic of Indonesia

Effectiveness of Public Communication

Availability and Affordability of Information

Efficiency and Integration of Public Service

Information economy development

VISION

MISSIONMISSION

Nation Unity

Professionalism in Public Service

Value innovation and Creativity

Synergy

GUIDING VALUEGUIDING VALUE

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ICT RoadmapICT Roadmap

Modernisation of Network

INFRASTRUCTURE

Network Availability

Access to everyone

REGULATION & ENFORCEMENT

General Regulation

Technical Regulation

Law Enforcement Education

System

Inventarisation

Empowerment human resources

HUM

AN R

ESOU

RCE

DEVE

LOPM

ENT

InfrastructureIndustr

Research & Development

INDUSTRY, APLICATIO

N & C

ONTENT

Hardware

2011 2012

2009

Goals :Affordable price

distributed access, high quality of services and

efficient used of ICT

2010

2013

Penetration & Distribution

QoS highSecurity

SoftwareCompetency

Content Aplication

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ICT Infrastructure Structure Today

Source : Indonesian ICT Infrastructure road map

PSTN* Dial-up* ADSL IP-TV PAY-TV**

9 M 16 M 10 M 130 M 2,5 M 1.0 M 0 0,45 M

15 % IP based Controller **

24 % IP based Core Network**Satellite = 92-C, 20-ext C, 4-Ku, 4-S, 7 MHz –

LFiber Optik = 21.000 km

3 % IP based Access Network**

Copper 2G-2.5G Broadband BroadcastingBasic

NB dataBasic

SMS-MMSNB internet

Multimedia AudioVideo

Penetration TodayDecember 2008

FWA(2G)

FWA & Seluler(3 G)

Seluler(2G)

** Last Dec 2007

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6

Service Evolution Toward NGN

General NGN Architecture

Current architecture Next Generation Network

DWDM/fiber

IP/MPLS

Voi

ce (

Fixe

d &

Wire

less/

mob

ile)

Vid

eo

Dat

a

Inte

rnet

Adv

ance

d Se

rvice

s App

s

Cont

ent

Applications

DWDM/fiber

TDM ATM

Switching IP

Voi

ce

AIN

Vid

eo Switc

hed

Dat

a

Circ

uit D

ata

Man

aged

IP

Inte

rnet

App

s

SDHSDH

Converged services

• Simplification of architecture:one network for voice–data– video

• Reduction in number and types of equipment

•Reduction of OPEX and CAPEX

• More efficient use of available bandwidth

• Possibility to provide new customized services

Eco System Benefit of NGNEnd Users

– Simplified billing – Single operator to deal with– Packaged rich services: Fixed, mobile, voice and data– Optimized delivery of multitude services– Single terminal– No network access boundaries (WLAN, DSL, Wcdma, …)– Single contact number– Service continuity: anytime, anywhere, any service

Network Operators– universal service offering– Interoperability (infrastructure, services)– Streamlined revenue generating services– Lower churn, higher customer retention– Streamlined and merger of Business Models– Reduction in OPEX, Capex (infrastructure, managed services,…)

Manufacturers– Common and more rapid product development– Optimized R&D– Market differentiation and penetration

Initiatives towards NGN9

Policy and regulation toward Convergence

Spectrum Policy and Pricing reform

Palapa Ring Project, to provide optical fiber backbone to all district capital

Structural separation on digital broadcasting transmission

USO Project

NETWORK

FIXED

MOBILE

SERVICES

BASIC

VALUE ADDED

MULTIMEDIA

EXISTING

Still use TDM based infrastructureAnd fixed with cable PSTN

FWA

GSM /CDMA

ADSL

NEW Develop new IP based infrastructure

3G/4G

FTTH/BMetro Ethernet

Develop new IP based infrastructure MIGRATE TOIP BASED

BWA

“Licensing regime should not be on the way of deployment of latest technology but at the same time technology should not be able to bypass regulatory system so that it disturbs the level playing field”

New Paradigm in Licensing Regime

NETWORK

Ser-vices

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3G/4G

OLD LICENSING REGIMENEW REGIME

Key Objectives11

Licensing Regime is Flexible, Technology and Service Neutral and Not Restrictive

The Key Objective is Growth Of Telecom Services In The Country

Level Playing Field

Consumer Benefits

Promotion Of Competition

Key Issues

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Spectrum Pricing

Interconnection

Tariff Related Issues

Numbering Plan Related Issues

Any Other Service Specific term(s) and Condition(s) in the license agreement

SOLVING THE SPECTRUM PRICING AS PREREQUISITE FOR IMPLEMENTATION OF UNIFIED LICENSING

Spectrum Pricing Principles 13

Simple to implement

Encourages efficient utilization of spectrum

Encourages rollout of networks and improve QOS

Should be Technology Neutral

Revenue to the Treasury

Does not give turmoil to the industry

Spectrum Policy and Pricing Reform

17/06/2009DEPKOMINFO

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Used to be only radio apparatus license.In year 2005, new concept of licensing was started to be applied:

Class licensing, Bandwidth licensing

In year 2006, auction in UMTS / 3G licensing was conducted.Planning to convert a radio apparatus license for cellular-type services to become bandwidth license by the end of 2010Balancing between mass market mechanism and spectrum commons:

Planning for mass market band such as cellular / Broadband Wireless Access, we will consider licensing through auctionSome bands will be considered to be class license (spectrum commons), such as 2.4 GHz, 5.x GHz, low power applications, etc.

85 % IP based Controller**

72 % IP based Core NetworkFiber Optik = 33.000 km**

45 % IP based Access Network**

Packet Switched ServiceBasic service, Duoplay, Tripleplay, Quadplay

PSTN Dial-up ADSL IP-TV PAY-TV

10,9 jt 23 jt 35,5 jt 180 jt 5,1 jt 3 jt 4,8 jt 1,5 jt

PENETRATION(Estimated on 2014)

FWA(2G)

FWA & Seluler(3 G)

Seluler(2G)

**Forecast in 2012

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PSTN Dial-up ADSL IP-TV PAY-TV

10,9 jt 23 jt 35,5 jt 180 jt 5,1 jt 3 jt 4,8 jt 1,5 jt

FWA(2G)

FWA & Seluler(3 G)

Seluler(2G)

PHASE I- Eastern IndonesiaTotal new FO Cable

> 10.000 kmTotal cost : USD 300 millions

Palapa Ring PROJECT

17/06/2009DEPKOMINFO

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• Consortium established among several local operators, at year 2008• Due to global financial crisis, the development is relatively slow

Goal : to provide fiber optic to 330 district capital

Government Role in Facilitating PALAPA RING Program

As Palapa Ring initiator in developing a nation-wide high capacity backbone network

As facilitator of the establishment of a consortium to constructthe Palapa Ring

To guarantee the competition safeguard in the consortium business model

As facilitator to avoid deadlock in negotiations

As facilitator in communicating with the other institutions and local governments

Ensuring the necessary regulatory framework for supporting the finalization of the whole Palapa Ring project, including possible implementation using USO fund.

Proposed Functional Separation in Digital Broadcasting Environment

1. In digital broadcasting environment, it is proposed to separate between:a) Content providers which provide contents; andb) Infrastructure providers which collect the contents from

various content providers and use the frequency channel to broadcast them to the viewer or listener digital receivers.

2. Content provider is a broadcaster who has broadcasting services license and only provide the broadcast content and will utilize the infrastructure provided by the infrastructure provider in order to distribute the broadcast program to digital TV and radio receivers.

3. Content providers will be regulated through broadcasting act.4. Infrastructure providers will be regulated through

telecommunication act.

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Now – 20141. No new analogue

assignment ;2. Start introducing digital

radio and TV broadcasting (VHF and UHF) ;

3. Simulcast period between analogue TV and digital TV ;

4. Start phasing out existing analogue TVs, especially in dense cities.

Phase 1 Phase 2 Phase 3

2020 - …1. Phased out all of

analogue TVs, both in dense cities or rural areas

2. Full digital broadcasting services in partially band IV and V UHF (Ch.22 – 48)

3. Channel 49 and above planned to be used for IMT and PPDR (WRC 2003 and 2007)

2015 – 20191. No more analogue TV

in dense cities, only in rural areas ;

2. Continuing phasing out existing analogue TVs for rural areas ;

3. New licensing for infrastructure provider operating in analogue-used channels

Analogue to Digital Migration Timeframe

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Universal Service Obligation

17/06/2009DEPKOMINFO

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Based on regulation, each telecommunication operators has submit 1.25% ( increased from 0.75%) of gross revenue annually for USO provision.In year 2008-2009, Government has conducted tender process to select the operator of USO .

Goals : providing access service to one village one telephone kiosk and to be enhanced to the broadband public access. The winner of 5 packets from 7 packets USO projects is the incumbent mobile operator, using extension of their network , with least cost subsidy and fastest implementation. The 2 other packets just recently re-tendered.By end of 2010 all villages will be provided with basic telephony and data ready.

In the future, DG Postel will consider to subsidize the provision of broadband backbone, such as subsidizing the fiber optic backbonedevelopment of Palapa Ring, as well as provision of broadband services in rural areas,.

Converged Regulation by 201421

Source : ICT Infrastructure Road Map

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Thank you for your attention ……

KOESMARIHATISPECIAL ADVISOR TO THE DGPOSTEL

www.postel.go.idEmail : koesmarihati.gmail.com