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  • 1. Frost & Sullivan : Indonesia ICT Outlook The Big Leap AheadFEBRUARY 15, 2012
  • 2. Everybody wants a share of the action
  • 3. Indonesia is leaping ahead in usage….Internet Users per population90.0 World Indonesia Malaysia United States India80.070.060.050.040.030.020.010.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Yahoo acquires Koprol CT group- Detik ($60mn) Facebook Republic Rakuten JV
  • 4. The next wave for consumer data is hereRobustFundamentals Growing adoption • 100% mobile SIM • 6.5 % GDP growth penetration • Next BRICs story • 15% smartphone • Record $ 19 bn FDI in 2011 users • Internet growth of • Upgrade of country 400%in 5 yrs grade (2011) Young population / long Entry of large players commutes Entry of Rakuten, Ebay 98% internet users on Growth capital from social media incubators rd largest Twitter and 3 Talent improvement Facebook Social/Entertainment oriented CultureCreation ofEnablers
  • 5. Enterprises need better ICT servicesOutside-in : FDI investment into Inside out : FDI investment byIndonesia $ bn Indonesia $ bn 19 15 22% 7.7 2.7 185% 2010 2011 2010 2011 • New ICT requirements – data centers, unified communication • More services - contact center etc
  • 6. Indonesia should prepare for next wave of ICT Growth Infrastructure Centric Growth Service Centric Growth shared dominated by Telecom operators by ICT ecosystem 2. Enterprise Services : Increase in scale and scope • Data center services and cloud • Managed services • BPO and contact center 1. Embrace the Data Phase of 3.Next Wave of consumer Smart Capital for further telecom services infrastructure Creation • Value unlocking of tower business • Mobil Internet the • Incubation biggest driver for • E-commerce / m-commerce/ telecom social commerce • Pay TV/ Multiscereen
  • 7. “ From Voice to Data” – the new era
  • 8. 1. Maturing industry – lower revenue growth Cellular Industry Market Revenue120,000 (IDR Bn) • As overall industry is maturing – total revenue growth is projected in100,000 range of 4% - 6% on the next 5 years 1.10 80,000 • Key factors impacting revenue 60,000 1.06 growth: 1.05 1.05 1.04 • Increase in CAPEX needs in 40,000 line with increase in data services 20,000 • Data revenue monetization that is still in “learning curve” 0 • Operator anticipation for LTE 2008A 2009A 2010A 2011E 2012E 2013E 2014E network deployment Source: Frost & Sullivan
  • 9. 1. Mobile data opportunity is huge Internet Users Forecast Data connections 160 145.2Millions 140 2010 2015 167 mn 120 100 CAGR: 29.7% 80 60 CAGR: 6.3% CAGR: 3.6% 62 mn 39.6 40 21.8 CAGR: 2.8% 22.9 16.9 18.3 20 3.7 4.2 0 Singapore Malaysia Indonesia Thailand 2011 2016 • Of the 167 mn , 109 mn will be on smartphones • 22 mn will be on tablets and large screen devices Source: Frost & Sullivan
  • 10. 2: Enterprise services Market potential of $ 3bn Huge opportunity in enterprise servics Market Size (US$ mn) Drivers4,000 Contact Center  Strong offload potential from Philippines for Services/BPO certain processes3,500  Domestic call centers like Infomedia looking to expand3,000 680  Overseas players like Aegis scouting for opportunities Contact Center2,500 355 Services/BPO ICT Managed  Huge interest in data center investments by System integration Services domestic and international players 462  Prevention of „Singapore hop‟2,000 ICT Managed Services  Next generation data centers to support cloud computing based approaches Software Development1,500 775  Includes cloud computing WAN Services System  System integration continues to grow – ERP 194 integration spending the key driver1,000 169 97  Fragmented market  Players are niche or narrowly focused only on 369 1097 500 BFSI vertical 435 0 2010 2015
  • 11. 3: Consumer Services E-enablement of Indonesia starting nowIndonesia Thailand Top 5 Local Websites UV Per Month Top 5 Local Websites UV Per Month UV as % of total Internet users UV as % of total Internet users 10% 8.8%, Detik Kapook 50% Local entertainment portals have 8% 8.6%, Kaskus 40.96% Sanook high 40% following among local users 44.78% 4.5%, tokobagus 6.6% Kompas due to abundance of free content 6% 33.32% 30% available Mthai Pantip 4% One-stop sites perform 20% 20.75% 4.0 %, Kapanlagi, better when they have 2% 19.12% both breath and depth 10% Manager 0% 0% 0.0% 0.5% 1.0% 1.5% 2.0% 0% 2% 4% 6% 8% 10% 12% 14% UV as % of population UV as % of population • Huge gap exists on online service creation Notes: Digital content excludes mobile content
  • 12. 3: Consumer Services E-enablement of Indonesia starting now Consumer e-enablement can potentially be $ 1.5 bn + market by 2015 Market Size (US$ mn) Drivers2,000 1820  Rakuten‟s entry into Indonesia through JV E-commerce1,800 (transaction  Other international players scouting for JVs – revneues) Korean and US based1,600  Indonesia online shopping % half of Thailand 6501,4001,200 E-Commerce Digital Content  Many app developers looking at Indonesia as a base for global development1,000 Ecosystem enablers  Huge interest from local entrepreneurs 378 Digital Content 800  Difficulty in monetization 600 Ecosystem  Payment mechanisms still a concern in Indonesia 350 enablers 400 780  Mobile payments – issues in regulation 120 200 57 172 0 2010 2015 Notes: Digital content excludes mobile content
  • 13. Some key takeaway…Based on Indonesia mobile-centric market, “mobile content” is still limited by bandwidth availability- they fit more into small-screen applications rather than band-width hungry apps. Indonesia broadband market is predominantly “mobile” centric to Big screen access voice & data content. Rich content is more likely goes vs. small through big screens. RBT, video clip, games are booming within mobile ecosystem while video streaming is more through PC/ netbook. Full video Current market is keen of video clip, music, & games download vs. clips through mobile phones while full video is not feasible due to sub- optimal network quality (long-wait or fail to load) i.e. high bandwidth/ capacity requirements to have ideal ecosystem for streaming rich content Rise on For Indonesia alone, the impression is the world’s second largest, digital ads after India, with a total impression of 3.76 billion and is one of four countries that have advertising impressions in total more than 1 billion in one quarter (BuzzCity, July 18th).
  • 14. Some key takeaway… Demand is As the market has shown, the demand for “everything online” is there..are there – from a simple browsing to mobile payment & transaction. we ready? The next question: Are we ready? In terms of basic infrastructure, market education, human competency, and market readiness Who drives “CAPEX” is key function in delivering good-experience on data the centric services i.e. cross platform, cross devices, cross “CAPEX”? geographical areas The next question: Who drives the budget? As almost all of Indonesian operators are in majority owned by foreign investment and budget allocation is certainly governed by interest of the major shareholders
  • 15. Way forward Short term Long-term „Back to QoS management is critical Leverage network-based to sustaining market basics‟ intelligence (smart enabler) momentum „Non Telco Enter media and cloud Smart investments revenues; „Change in VAS: Variety of „appiifed‟ Focus on verticals/ cross Services services industry business models Model ‟ 15
  • 16. See you somewhere…online Linkedin: Jayesh Easwaramony Twitter: Jeaswaramony