MOBILE BROADBAND POLICY IN INDONESIA: IMPLEMENTATION CHALLENGES Ministry of Communication and Information Technology (Kominfo) Republic of Indonesia Broadband Workshop Pretoria, South Africa, 11-12 November 2013

Outline Indonesia ICT Statistics National Broadband Plan Target and action plan Implementation: Spectrum refarming Cases of 2100 MHz, 700 MHz and 1800 MHz National Submarine Backbone Project Conclusions

Indonesia: A Brief Overview SOUTH AFRICA Population (millions) 237.4 52.9 Surface Area (thousand km2) 1,904.5 1,221.0 GDP (PPP) per capita (USD) 5,182 11,525 Human Development Index (HDI) 0.629 GDP growth (annual %) 6.2 2.5 Telephone lines per 100 inhabitants 15.52 7.94 Mobile subscribers per 100 inhabitants 115.2 134.80 Percentage of individuals using Internet 15.36 41.00 Fixe-wired broadband subs. per 100 inhabitants 1.22 2.18 Percentage of household with computer 15.1 21.5 Population is unevenly distributed, 55% of population lives in Java island (7% of total area). Source: ITU statistics (2012) & Wikipedia

Indonesia ICT Statistics Services Unit 2004 2009 2010 2014 * Telephone Fixed Line Unit 8,703,218 8,423,973 8,429,180 Mobile 32,009,688 190,062,615 200,636,587 222,853,663 Total 40,712,906 198,486,588 209,065,767 307,145,463 Teledensity Per 100 inhabitants 18,82 86,06 89,79 100 2. Internet Subscriber Person 1.087,428 2,000,000 2,700,000 7,000,000 User 11,226,143 30,000,000 45,000,000 130,000,000 3. Broadband 84,900 4,520,000 7,290,000 17,000,000 In terms of ICT statistics, mobile penetration and internet users have increased rapidly. Just like many other developing countries mobile penetration is much higher than the fixed. We expected that in year 2014 teledensity become 100%. *) Prediction Indonesia will depend on mobile broadband Source: Mastel, Kominfo dan Bappenas

MOBILE BROADBAND COVERAGE (90% BROADBAND) Here some other figure, the coverage of mobile broadband. Each color represents different operators. Mobile broadband coverage is 90% of broadband. So mobile broadband is dominant technology to provide broadband coverage. Source: MCIT (Kominfo) Statistics 2009

Infrastructure (minimum) NATIONAL BROADBAND PLAN: TARGET 2013 - 2017 2013 2017 Infrastructure Fixed broadband : 15% households (1Mbps) , 30% buildings (100 Mbps), and 5% population; Mobile broadband : 12% population (512 kbps) Infrastructure (minimum) Fixed broadband : 40-75% households (2Mbps), 50%-80% buildings (1 Gbps), dan 25% population; Mobile broadband : 75% population (1 Mbps) And this is target in national broadband plan. It consists of fixed and mobile. For fixed we classify into households, buildings and population. For the mobile there are two-fold target: coverage (from 12 to 75% of population) and capacity (from 512 kbps to 1 Mbps). In terms of demand side, the priority of broadband adoption is for government, learning, health, logistics and procurement. Utilization / Adoption Priority: e-Government; e-learning; e-health; e-logistics, e-procurement

Implementation Strategy Principles: Market driven Community involvement & ownership Universal access Affordability Leadership POLICY REGULATION INFRASTRUCTURE Improving broadband access Development of backbone, core network dan internasional link Reduce the dependency on international link. USO / ICT Fund for ecosystem development Broadband Plan Review (strategy, target, goals, stakeholders etc.) How to achieve the target in year 2017. There are some principles: (the operation of market forces) Here there are some strategy related to policy, regulation and infrastructure. Policy: funding, review of broadband plan Regulation: transitional regulation, market analysis, spectrum - Infrastructure: broadband access, backbone Transitional regulation (short-term) Market review and analysis – competition, license, tariffs etc. Regulation on spectrum and backbone

Target and Action Plan (Capacity) Fixed and Mobile Target Source: Indonesia Broadband Plan (2013) Speed 2013 2014 2015 2016 2017 Fixed Houseld 1 Mbps 2 Mbps Building 100 Mbps 200 Mbps 500 Mbps 800 Gbps 1 Gbps Mobile 512 kbps Ministry of Kominfo Regulation on standards and quality of broadband Regulation on standards and quality of broadband Regulation on standards and quality of broadband Ministry of Finance Incentive and capital Telecom Operators To provide networks and quality of services Local government To provide right of way (ROW) Community Quality monitoring Vendor To provide devices and systems What is the target and action plan from 2013 to 2017. Here the targets of capacity consisting of two: fixed and mobile. Fixed consist of house and building. What is the role of each stakeholder. Here the responsibilities. Ministry of ICT or Kominfo is in charge of regulation on standarss and quality of broadband. Ministry of Finance is responsible for incentive and capital. The operators is to provide network and quality of services etc. Local government is to provide right of way (ROW). ROW become a big issue since each public utilities tend to construct their own network and there is no intention to share among them.

Target and Action Plan (Coverage) Access Target Source: Indonesia Broadband Plan (2013) 2013 2014 2015 2016 2017 Fixed 45% 55% 75% 85% 100% Mobile Broadband 70% 80% 90% Ministry of Kominfo To create regulation for broadband dissemination To encourage operators to expand networks Ministry of Finance Incentive and capital Operator To provide networks Local government To provide right of way (RoW) People Captive market Supervisory of Quality of Service Vendor To provide devices and systems And for the target of coverage, it is based of the percentage of population having fixed or broadband access. There are also the roles of each share holders including the ministry of Kominfo. Based on this target, in year 2017 each people should have broadband connection.

Target and Action Plan (Backbone Access) Backbone Target (City and Regency) Source: Indonesia Broadband Plan (2013) 2013 2014 2015 2016 2017 Fixed 40% 50% 75% 85% 100% (517 district or municipalities) City or regency connected to backbone 80% 100% Ministry of Kominfo To create regulation for broadband dissemination To encourage operators to develop backbone network to regency level To regulate tariff which encourages community to use broadband services To encourage operator to expand backbone coverage To ensure all city and regencies accessed by optical backbone Ministry of Finance Incentive and capital Operator To provide networks Local government To provide right of way (RoW) People Captive market To allow right of way (RoW) and land acquisition/ usages Vendor To provide devices and systems And this is the target for backbone connection. Currently Indonesia has 517 municipalities or regencies.

Implementation Strategy through Spectrum Policy

Mobile Broadband: Spectrum Issues Traffic is growing exponentially (Ipad, Iphone, tablet, android, etc.) Demand of mobile broadband spectrum: ITU-R Report M.2078, the world would require 1,280 – 1,700 MHz bandwidth in year 2020 Some countries prioritized to acquire more bandwidth Band < 1 GHz (best for capacity and coverage) Band > 1 GHz (best for main business or economic development areas), including WiFi off-loading Let me start with the spectrum issues of broadband.

Mobile Broadband: Business Issues The growth of data has increased rapidly but the voice declined. Cellular operators around the world has experienced the decrease of revenue growth. Scissore Effct Scissor Effect Flexibility of License become a key issue (time to market, regulatory cost): Spectrum Sharing, MVNO, flexible use of spectrum. Current business issues: data has increased rapidly, voice is declined. But the issue is network cost has also increased and the revenue growth has dropped or stable. Regulatory cost becomes burden for the operators and flexibility of license become more important.

Current IMT-Band in Indonesia (Existing and Future Potential) Bandwidth Current Use 450 – 470 MHz 2 x 7.5 MHz Mobile Cellular (CDMA) 694 – 820 MHz 2 x 45 MHz Analog TV (Potential of Digital Dividend LTE 700 MHz) 825 – 845 dan 870 – 890 MHz 2 x 20 MHz FWA and Mobile Cellular (CDMA) 890 – 915 dan 935 – 960 MHz 2 x 25 MHz Mobile Cellular (GSM) 1710 – 1785 dan 1805 – 1880 MHz 2 x 75 MHz 1903.125 – 1910 dan 1983.125 – 1990 MHz 2 x 8.675 MHz Mobile Cellular (PCS-1900/CDMA) 1920 – 1980 dan 2110 – 2170 MHz 2 x 60 MHz Mobile Cellular (UMTS) 2300 – 2390 MHz 90 MHz Broadband Wireless Access. 2360 – 2390 MHz licensed issued for 15 Regional Zones (Wimax / LTE TDD) 2500 – 2690 MHz 2 x 15 MHz BWA (TDD) 150 MHz 2520 – 2670 MHz is currently used by Broadcasting Satellite Services This is the list of mobile broadband identified in Indonesia to achieve targets of national broadband plan. Totally there are about 550 MHz which is potential for mobile broadband. Future uses depends on how much government efforts to acquire and to refarm those bands for mobile broadband. Total = 552.35 MHz

Spectrum refarming: Case of Indonesia Current BWA 2300 MHz Fixed Mobile Service level: Future 800 MHz rearrangement Applications level: P-P links PMP links PMR Cellular 2G 3G Technical level (1) : Current PMR 400 MHz (analog to digital) Spectrum refarming is basically reallocation existing spectrum for different usage. There are three ways to achieve that: allocation (such as from fixed to mobile), band plan (such as change from PP to PMP linkor trunked radio to celullar) and channeling plan Analogue Digital 25 kHz 12.5 kHz Current 2100 MHz Change of allocation plan Technical level (2) : Freq A Freq B Change of band plan Change of channelling plan - refarming process

Spectrum Refarming Strategy To reach the targets of national broadband plan: Short-term: Refarming 450 MHz, 850 MHz, 900 MHz, 1800 MHz, 2.1 GHz dan 2.3 GHz. Mid-term: Digital Dividend 700 MHz, extended 850 MHz (Trunking Band), 2.6 GHz, 3.5 GHz, and other bands identified by ITU IMT band Unlicensed (Class Licensed) Band : 2.4 GHz, 5.1 GHz, 5.8 GHz, 26 GHz, 60 GHz, for traffic off-loading. In order to fulfill the target of national broadband plan, Indonesia has two-fold strategy. The first one is short-term which high priority due to government direction and The second one is mid-term which may require the complete migration of other services. The other strategy is to release band > 1 GHz for unlicense band for traffic off-loading. Criteria: government direction, priority, refarming complexity, business need and international regulation.

Short-term Strategy: 2100 MHz Rearrangement before 1 2 3 4 5 6 7 8 9 10 11 12 1920MHz (UL) 1980 MHz (DL) HCPT Axis Axis Tsel Tsel HCPT Isat Isat XL XL New (Tsel) Blank Blank New (XL) 2110 MHz (DL) 2170 MHz (DL) after 1 2 3 4 5 6 7 8 9 10 11 11 12 1920MHz (UL) 1980 MHz (UL) HCPT HCPT Tsel Axis Tsel Tsel Isat Isat XL Isat XL XL Blank Axis Axis Blank merger 2110 MHz (DL) 2170 MHz (DL) This is an example of short-term strategy. We just completed the rearrangement. It took 6 months to complete. The objective is to make the band contigous. Objectives: Contiguous band and level of competition Benefits: optimal uses of bandwidth with less guard band, lower number of base tranceiver station (BTS). Implementation: 2013 (completed within 6 months), except merger between two operators.

Mid-term Strategy: Digital Dividend 700 MHz TV ANALOG 328 MHz Analog TV Free To Air (FTA) 478 806 MHz DIGITALIZATION OF BROADCASTING PROCESS TV DIGITAL ERA Analog Switch-Off (ASO), 1 Jan 2018 Future DTV DIGITAL DIVIDEND 478 806 MHz Digital Terestrial TV Free To Air (FTA) 526 694 Mid-term strategy: the refarming 700 MHz from existing analog TV. New regulation 192 MHz 112 MHz LTE 700 MHz is beneficial to accelerate Broadband particularly in rural areas with the existing BTS It can be implemented after the completion of digital switchover end of 2017

Mid-Term Strategy: Refarming GSM 1800 MHz Best spectrum for LTE in terms of coverage and ecosystem, the most bands owned by operators are not contiguous. Complexity is high as 70% of handset is GSM 2G . Evolution: GSM/EDGE, UMTS, HSPA, HSPA+, LTE LTE is most effective if the Bandwidth is more than 20 MHz UPLINK DOWNLINK

National Backbone Project Total undersea cables 35,280 km; Total underground cables 21,807 km First stage: Total installation> 10,000 km; Total cost: USD 300 millions Broadband access is not working well without backbone. Particularly in the remote part of East Indonesia, The construction of submarine optical backbone become important. Here as shown in the picture, pink line is one of the packages ofthe first stage of the project about 10,000

Conclusions Indonesia has developed national broadband plan but strong commitment and collaboration are needed for the successful implementation. From year 2013 to 2017, the target for national broadband infrastructure has been set which include strategy, coverage, capacity, and the roles of stakeholders. In terms of implementation, broadband infrastructure development in Indonesia has currently focused on spectrum refarming of mobile broadband to reach targeted coverage and capacity. To meet the growing demand of spectrum, government should identify candidate bands for mobile broadband and find the best spectrum policy and strategy to acquire and to refarm the band.

Ministry of ICT, Indonesia E-mail: i.nyoman.adhiarna@kominfo.go.id Thank You Nyoman Adhiarna Ministry of ICT, Indonesia E-mail: i.nyoman.adhiarna@kominfo.go.id Phone: +62 (21) 29576455