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Overcoming Regulatory Challenges to Build a Successful Future for WiMAX

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Presented at WiMAX Strategies Asia

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Overcoming Regulatory Challenges to Build a Successful Future for WiMAX

  1. 1. Overcoming Regulatory Challenges to Build a Successful Future for WiMAX Arief Hamdani Gunawan Senior Officer – Regulatory Management TELKOM INDONESIA
  2. 2. The Core Business As of June 30, 2009 :
  3. 3. Penetration in Telco Industry As of June 30, 2009 :
  4. 4. The Internet Business As of June 30, 2008 & 2009 (In Rp. Tn):
  5. 5. Outline Update on the issue of WiMAX licenses in Indonesia: Opportunities and challenges Spectrum allocation approaches and implications for WiMAX operator Role of regulators in creating a level playing field for WiMAX Towards regulatory harmonization Why is this important?
  6. 6. Regulatory Approach <ul><li>Uses reactive measures to correct undesirable market developments. </li></ul><ul><li>Preferred where: </li></ul><ul><ul><li>markets are already competitive and in little risk of domination by one or more players; </li></ul></ul><ul><ul><li>markets are in an emergent condition, are not in danger of being dominated by one or more players, but could be distorted by overzealous regulation </li></ul></ul><ul><li>Relies on proactive regulation to prevent undesirable market developments. </li></ul><ul><li>Preferred where: </li></ul><ul><ul><li>markets are newly liberalized; </li></ul></ul><ul><ul><li>markets are at risk of domination by one or more players </li></ul></ul><ul><ul><li>key regulatory, economic, social or policy objectives cannot be fulfilled by less </li></ul></ul>Ex – Post and Ex – Ante
  7. 7. Regulation B E S C H I K K I N G R E G E L I N G Ex post policy Ex ante policy B W A (Broadband Wireless Access) 3.3 GHz allocation (migration) 2.3 GHz allocation 3.3 GHz implementation 2.3 GHz implementation Bidding
  8. 8. Frequency Exclusivity @ WiMAX <ul><li>There are three principal economic justifications for relying on exclusive licenses: </li></ul><ul><li>Spectrum scarcity : views spectrum as an economic good and focuses on the role of markets in allocating that good. </li></ul><ul><li>Investment incentives : focuses on the need to provide users and providers with appropriate incentives to invest in network equipment and services. </li></ul><ul><li>Interference management : recognizes that even when spectrum is not “scarce,” it may be necessary to coordinate user behavior to allow users to share spectrum without adversely impacting or “interfering” with each other. </li></ul>Investment incentives Interference management Spectrum scarcity
  9. 9. Outline Update on the issue of WiMAX licenses in Indonesia: Opportunities and challenges Spectrum allocation approaches and implications for WiMAX operator Role of regulators in creating a level playing field for WiMAX Towards regulatory harmonization Why is this important?
  10. 10. Spectrum Allocation Approaches Shared Band Migration FDD - TDD Beauty Contest Biding Zoning Frequency Exclusivity
  11. 11. WiMAX Zone <ul><li>1. North Sumatera </li></ul><ul><li>2. Central Sumatera </li></ul><ul><li>3. South Sumatera </li></ul><ul><li>4. Banten & Jabotabek </li></ul><ul><li>(Jakarta, Bogor Tangerang, Bekasi) </li></ul><ul><li>5. West Java </li></ul><ul><li>6. Central Java </li></ul><ul><li>7. East Java </li></ul>8. Bali & Nusa Tenggara 9. Papua 10. Maluku & North Maluku 11. South Sulawesi 12. North Sulawesi 13. West Kalimantan 14. East Kalimantan 15. Riau Islands 2.3 GHz and 3.3 GHz Shared Band Migration FDD - TDD Beauty Contest Biding Zoning Frequency Exclusivity
  12. 12. 3.3 GHz Blocks <ul><li>3.3 GHz: FDD to TDD </li></ul><ul><li>3.4 - 3.6 GHz: migrate to 3.3 GHz (TDD) </li></ul>8 Blocks – 12.5 MHz Shared Band Migration FDD - TDD Beauty Contest Biding Zoning Frequency Exclusivity
  13. 13. 3.3 GHz Operators 8 Operators (15 Zone – 12.5 MHz )
  14. 14. 2.3 GHz Allocation <ul><li>2300 – 2390 MHz: bidding, band basis </li></ul><ul><li>2390 – 2400 MHz: USO, tower/coordinate basis </li></ul>3 from 15 Blocks – 15 and 10 MHz Shared Band Migration FDD - TDD Beauty Contest Biding Zoning Frequency Exclusivity
  15. 15. 2.3 GHz Operators 1/2 8 Operators (15 Zone – 15 MHz )
  16. 16. 2.3 GHz Operators 2/2 8 Operators (15 Zone – 15 MHz )
  17. 17. Outline Update on the issue of WiMAX licenses in Indonesia: Opportunities and challenges Spectrum allocation approaches and implications for WiMAX operator Role of regulators in creating a level playing field for WiMAX Towards regulatory harmonization Why is this important?
  18. 18. Regulatory Impact Analysis <ul><li>Regulatory Impact Analysis (RIA) is a policy tool widely used in OECD countries. </li></ul><ul><li>RIA examines and measures the likely benefits, costs and effects of new or changed regulations. </li></ul><ul><li>Tools: </li></ul><ul><ul><li>Reference Checklist for Regulatory Decision-Making </li></ul></ul><ul><ul><li>Principles of “Good Regulation” </li></ul></ul>
  19. 19. 10 Reference Checklist for Regulatory Decision-Making <ul><li>1. Is the problem correctly defined? </li></ul><ul><li>2. Is government action justified? </li></ul><ul><li>3. Is regulation the best form of government action? </li></ul><ul><li>4. Is there a legal basis for regulation? </li></ul><ul><li>5. What is the appropriate level (or levels) of government for this action? </li></ul><ul><li>6. Do the benefits of regulation justify the costs? </li></ul><ul><li>7. Is the distribution of effects across society transparent? </li></ul><ul><li>8. Is the regulation clear, consistent, comprehensible and accessible to users? </li></ul><ul><li>9. Have all interested parties had the opportunity to present their views? </li></ul><ul><li>10. How will compliance be achieved? </li></ul>
  20. 20. 8 Principles of “Good Regulation” <ul><li>(i) serve clearly identified policy goals, and be effective in achieving those goals; </li></ul><ul><li>(ii) have a sound legal and empirical basis; </li></ul><ul><li>(iii) produce benefits that justify costs, considering the distribution of effects across society and taking economic, environmental and social effects into account; </li></ul><ul><li>(iv) minimise costs and market distortions; </li></ul><ul><li>(v) promote innovation through market incentives and goal-based approaches; </li></ul><ul><li>(vi) be clear, simple, and practical for users; </li></ul><ul><li>(vii) be consistent with other regulations and policies; and </li></ul><ul><li>(viii) be compatible as far as possible with competition, trade and investment-facilitating principles at domestic and international levels. </li></ul>
  21. 21. Modern License Development Commitment (annually, cumulative)
  22. 22. Outline Update on the issue of WiMAX licenses in Indonesia: Opportunities and challenges Spectrum allocation approaches and implications for WiMAX operator Role of regulators in creating a level playing field for WiMAX Towards regulatory harmonization Why is this important?
  23. 23. Availability of the Frequency Bands Harmonized development of many radiocommunication services Their efficient and interference-free operation General rules for the assignment and use of frequencies as well as some special rules (Article S4). <ul><li>Regulators should try to allocate spectrum that is in harmony with international spectrum allocations. </li></ul><ul><li>The use of a single band for the same service across multiple countries can create economies of scale in the production of wireless end-user equipment. This in turn can lower the cost of broadband-capable devices, thereby increasing the demand for broadband services and making them more accessible to a wider base of consumers. </li></ul><ul><li>Global harmonization can also facilitate international roaming, which can increase the productivity of workers who use broadband devices when traveling around the world. </li></ul><ul><li>The Business of WiMAX by Deepak Pareek page 266 </li></ul>
  24. 24. Availability of the Frequency Bands Rules for assignment and use of frequencies (AR S4) Allocation of frequencies (AR S5) Special rules and specific provisions (AR S46 to S58) Notification and use of frequency assignments Efficient and interference-free operation Radio Regulations Administration
  25. 25. Availability of the Frequency Bands Sub- regional National Sub- regional Sub- regional National National Regional allocations Regional allocations Regional allocations Worldwide allocations Article S5 Frequency allocations
  26. 26. Closing: Telco Industry - Environment Overview Highlights on Telco Industry in Indonesia :
  27. 27. Thank You Arief Hamdani Gunawan [email_address]

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