INDONESIAN TELECOMMUNICATIONS INDUSTRY

D. Siregar - MASTEL

COUNTRY BACKGROUND

GEOGRAPHY

Area Terrain

: 2 Million Sq Km : More than 17.000 Island, 6000 are inhabited

PEOPLE

Population : 224 Million (2004) Annual Growth : 1,9% Work Force : 91 Million

KEY ECONOMIC INDICATORS (2004)

GDP Capita GDP Percent of House with electricity Inflation Unemployment : US$ 260 Billion : US$ 1,180 : 90% : 6,5% : 10%

INDUSTRY RESTRUCTURING

INDUSTRY RESTRUCTURING
Repositioning incumbent operators : Privatilization of state-owned Telecom Companies Early termination of voice exclusivity right Unwinding of Byzantine Cross Ownership arrangement between Telkom & Indosat.

INDUSTRY RESTRUCTURING
Further privatization of Telkom and Indosat In 2002. Establishing regulation to support and ensure competition environment : Tariff Interconnection and Clearing House USO

INDUSTRY RESTRUCTURING
Regulatory Authority : BRTI, The Indonesian Telecom Regularly Agency was approve in 2003 and began its formal role in January 2004.

KEYS TO WIRELESS INDUSTRY GROWTH

Private Investment Competitive Market Interconnection Pricing and Tariff Reform Licensing

KEYS TO WIRELESS INDUSTRY GROWTH

Prepaid Services Beneficial and Growing : Less complicated for consumers Allow consumers to control spending Reduce operators uncollectible accounts.

LICENSING
Essential Principles Non Discrimination Technologically Neutral Transparent Process

SPECTRUM AWARDS
A rational process need to prevail Licency Fees should not discourage Network Development.

INDONESIA TELCO INDUSTRY

Competitive Landscape Foreign Telcos Player in Indonesia Market Penetration Customers & Teledensity Forecast Regulation issues

COMPETITIVE LANDSCAPE
Tech
Telkomsel Indosat Excel Natrindo CAC Telkom Indosat Mobile-8 Bakrie Tel Telkom BBT Sampoerna Tel GSM & 3G GSM Regional
Not Operated Yet

License
Nation Wide

Nation Wide CDMA (Fixed Wireless) Fixed Wireline NMT-450 Regional Nation Wide Limited Area Regional

FOREIGN TELCOS PLAYER IN INDONESIA

Local Player
Telkomsel Mobile 8 Indosat Excelcomindo Bakrie Telecom Cyber Access Lippo Telecom Sampoerna Tel

Foreign Player
Singtel -STT Telecom Malaysia -Hutchinson Maxis --

MARKET PENETRATION

CUSTOMER & TELEDENSITY FORECAST (2004 2010)

REGULATION ISSUES

BEST PROSPECT & OPPORTUNITY

INVESTMENT
Cellular industry (2005) The investment is estimated of US$ 1,5 Billion. FWA Sector (2005) The investment is estimated of US$ 400 500 Million

INVESTMENT
Backbone Submarine optical cable across the main island. Long Distance License? International backbone Submarine optical cable, Jakarta Hongkong/Malaysia. SLI License

GOODS & SERVICES

Telecom Equipment Terminal Content

MARKET ENTRY STRATEGY

Quality : Highly accurate, reliable, durable and easy to operate and maintain

Geographical Coverage & Services Barrier to entry: - No market barrier - To meet the technical Standard

THANK YOU

SOURCES
DG Postel PT. Telkom Excelcomindo