The document discusses regulations around mobile devices in Indonesia. It covers the industry landscape including major operators and market shares. It also discusses Indonesia's general mobile device market conditions, including a decline in 2008 due to overstocking and economic issues. The converged devices segment is seen as a promising area for growth. The document also summarizes stakeholders in the mobile device industry and issues around interoperability and licensing. Regulatory issues discussed include privacy, security, and internalization of mobile device production. The future is predicted to include more integration of broadcasting and telecom.

3. TIME ( Telecommunication, Information, Media and Entertainment ) Indonesia Main Operators Fixed Wireline Broadband - Wireline Broadband - Wireless Cellular - GSM Cellular - CDMA Fixed Wireless Access Pay TV Portal Wholesale Network IT Services Enterprise

4. Indonesia ICT Market Profile Status: Q1 2008

5. Market share in wireless 2007 Wireless Industry Fixed Wireless 46.1% 14.9% 58% 6.1% 36% 24.1 % Limited Mobility 10.3% 2.5 % 48.7 % 14.2 % Hutchinson 1.6%

7. Stakeholders and Industry Landscape Mobile Device (Industry) (Mobile Network) Operator SIM Card (Industry) Application/Content Provider C U S T O M E R (deployment speed to the end user) HE / LE MD Common MD SMP - MNO Small - MNO Capability Capacity Voice SMS Internet Push Pull Post Paid Pre Paid Quality Price Regulatory involvement

8. Interoperability Among Stakeholders and Licensing Regime M o b I l e D e v i c e ( I n d u s t r y ) (Mobile Network) Operator SIM Card (Industry) Application/Content Provider Customer Loosely coupled / independency Tightly coupled / locking factors / dependency HE / LE MD Common MD Transferable address book & messages between MD and SIM card Locking identity ex. Blackberry Transferable address book among customers ex. Nokia HE Applications ex. BBM, iTunes Common / LE Applications Modularity Peripherals/ NFC Mandatory License Conditional License Conditional License

9. Indonesia Super Low Cost (Low End) Handset War Rp 175,000 ($ 19) Rp 168,000 ($ 18) Rp 199,000 * ($ 22) Rp 190,000 * ($ 21) Rp 199,000 ($ 22) Nexian FP288 ZTE C300 Huawei C2601/C2605 ZTE X175/X176 Huawei C120 Tariff Call Rp 49/min SMS Rp 5,000 unlimited Tariff Call Rp 1,000/day unlimited SMS Rp 10/SMS Tariff Call Rp 50/min or Rp 1,000/hour Free 1500 SMS Tariff Call Free (90 days period) SMS Rp 25/SMS Tariff Call Rp 100/min SMS Rp 100/SMS On net Call & SMS On net Call & SMS On net Call & SMS * Excl 10% VAT On net Call & SMS * For purchase prepaid minutes, handset free On net Call & SMS

10. Regulatory Issues Registered MD Internalization More standard Rather than regulatory Regulating VAS QoS and Features HE / LE MD Common MD Transferable address book & messages between MD and SIM card Locking identity ex. Blackberry Transferable address book among customers ex. Nokia HE Applications ex. BBM, iTunes Common / LE Applications Modularity Peripherals/ NFC

14. The Near Future trend of Telco Industry The boundary of broadcasting & telecom is being abolished along with the development of digital technology and broadband network Broadcasting Telecom Voice/Data Telecom Network Telecom Devices Broadcasting Program Broadcasting Network TV Broadcasting Telecom Voice/Data Telecom Network Telecom Devices Broadcasting Program Broadcasting Network TV Telephony Network + Internet Network + Broadcasting Network Telephone + PC + TV Future Contents Network Device Present Past Voice + Data + Image Access lisence Services lisence

15. Future Regulatory Perspective on MD R E G U L A T O R Y D E G R E E R E G U L A T O R Y A P P R O A C H No Regulation / B2B / Self Regulation Ligh Touch / Soft Regulation Heavily Handed / Hard / Strick Regulation Ex Ante Policy Ex Post Policy P0 S0 B0 T0 Privacy Security Broadcast Transaction P1 S1 S1 B1 T1

16. Regulatory Concepts Bearer Agents Remittances Payment Services E-Money Banking MNO Role Not involved in the provision of financial services Involved in cash in/out Becomes financial institution Regulatory Role No regulatory compliance AML/ CFT Prudential regulation