1. Frost & Sullivan : Indonesia ICT Outlook
The Big Leap Ahead
FEBRUARY 15, 2012

2. Everybody wants a share of the action

3. Indonesia is leaping ahead in usage….
Internet Users per population
90.0
World Indonesia Malaysia United States India
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
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 here
Robust
Fundamentals 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 Culture
Creation of
Enablers

5. Enterprises need better ICT services
Outside-in : FDI investment into Inside out : FDI investment by
Indonesia $ 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 Revenue
120,000 (IDR Bn) • As overall industry is maturing –
total revenue growth is projected in
100,000
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
145.2
Millions
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) Drivers
4,000
Contact Center  Strong offload potential from Philippines for
Services/BPO certain processes
3,500
 Domestic call centers like Infomedia looking to
expand
3,000 680  Overseas players like Aegis scouting for
opportunities
Contact Center
2,500 355 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 Development
1,500 775  Includes cloud computing
WAN Services System  System integration continues to grow – ERP
194 integration spending the key driver
1,000 169
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 now
Indonesia 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) Drivers
2,000
1820  Rakuten‟s entry into Indonesia through JV
E-commerce
1,800
(transaction  Other international players scouting for JVs –
revneues) Korean and US based
1,600
 Indonesia online shopping % half of Thailand
650
1,400
1,200 E-Commerce Digital Content  Many app developers looking at Indonesia as a
base for global development
1,000 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