Affordable & Effective ICT for

Rural Indonesia

Challenge: Delivering Low cost ICT and better performance for services

Syailendra@telkom.co.idStrategic Project Management

PT Telekomunikasi Indonesia Tbk.

Jakarta, 23 March 2011, Indonesia Country Workshop on Rural ICT Development, ITU/ADB

Challenges for ICT in Indonesia• 13,700 islands (no 1 in the world)• 300 ethnic groups (no 1)• 1,900 km x 5,100 km (no 1) • 240 Millions population (no 4)• largely rural and poor areas (no 3)• 62.806 Desa/village

Source World Bank: Making the New Indonesia Work for the Poor, 2006

Percentage of Poor people

low density of ICT, is a growth opportunity

ChallengeHow to provide affordable & Effective ICT with better performance at rural

Source Badan pusat statistik, Berita Resmi Statistik No. 45/07/Th. XIII, 1 Juli 2010

Garis Kemiskinan Nasional Rp211.726 per kapita per bulan, Maret 2010 (Rp 7,000/day)

Indonesia Competitiveness Index

In the global context, Indonesia competitiveness index based on the Wolrd EconomicForum (WEF) 2009-2010 ranked 54, WEF Competitiveness is based on the pillars : 1. effectiveness of the functions of public and private institutions,2. availability of infrastructure,3. macroeconomic framework is stable,4. health facilities and basic education,5. higher education and training,6. market efficiency,7. benefits of technology utilization,8. production process, innovation.

Increase the competitiveness index will require technology as an accelerator.

Opportunity for improvement

Integrated Empowerment Model for Rural

1. Energy: electricity, engine

2. Connectivity: digitally & physically connected

3. Education: knowledge, skill improvement

4. Financial: capital, transfer, save, transaction

5. Health: walk, drive, think

Agricultures Foods Crafts tourism

Affordable & effectiveness Technology , productive people, unlimited resources

Local & Global Markets

Increase in Competitiveness index

digital media services : e-finance, e-store, e-trade, e-paymnt, e-...

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ManufacFishery ……..

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CK Prahalad

Indonesia RayaPoor Fisherman

A fisherman, dreaming to own a fishing boat. There is no formal bank access for the poor in rural areas.

ICT implementation for banks in rural areas requires a high cost ICT

Case Indonesia

ChallengeHow can ICT address the needs of delivering low cost banking to reach all

Indonesia's population ?

The bank is part of mother industry for rural economic growth

Internet• 242,968,342 population • 30,000,000 Internet users as of Sept/09, 12.3% penetration • 27,338,560 Facebook users on August 31/10, 91% internet users

Internet• 242,968,342 population • 30,000,000 Internet users as of Sept/09, 12.3% penetration • 27,338,560 Facebook users on August 31/10, 91% internet users

www.internetworldstats.com

cellular200 millions subsc cellular200 millions subsc

ICT facts in Indonesia

Affordable & Effective ICT

Delivering low cost affordable & effective ICT Services

Technology Options

Affordable & effectiveness technology

Delivering low cost services

Business models can run, sustain and grow at BoP market

BoP: Bottom of Pyramid (people who have low income per capita per month)

ICT for Productivity

sarana transaksi keuangan

money transfer servicesBanking & Payment Ecosystem services

eMoney services

digital music ecosystem services Electronic voucher agent services

education ecosystem services

everything as a service

Delivering low cost affordable & effective ICT Services

High Cost Low CostICT Infrastructure Own SharedICT operation Own SharedBusiness Model Buy Pay as you goTime Delivery Slow FastService Applic Custom Parameterized

Case.. LIVE ! Low Cost ICT for rural BPR & Koperasi

… with better performance for services…

everywhere, plug n play rural banking/koperasi

Cloud Managed Financial Services

Cloud Managed Financial Services

Bank KoperasiBank Koperasi

Branch Branch Branch Branch

electronic channel: EDC, Mobile, Internet, ATM

Shared•Data Center•DRC•Server•Software•Development•Ict operation•Processing•Reporting engine

Biller others

Business Model- Pay as you go- Fast food model

Live Since 28 Apr 2009400 branch online 1 million people connected to the bank

How Low Can You Go in Rural…with better performance…

1.More standard = get more share2.More Share & simple = get lower cost3.Lower cost = get bigger market

Affordable & Effective Technology for Rural

Simple Green Screen - Low bandwidth 9,6 kbps- low spec PC- secure & stable

Business Model is the Key

Pay as you go

Sharing Infrastructure

Ecosystem Services

Payment

Services

Infrastructure

Sharing OperationOperation

ChannelPartnership/Self service

Empowering local enterpreneur

Cloud service Model

Case M-Kios

TELKOMSEL

Authorized Dealer

Agent

Subscriber

Recharge system for prepaid services (pay as you go)

e-Recharge Agent

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Industry Model National Focuses – Effective ICT Industries

Device Manufacture & Software Product: Server, CPE, Router, Modem, Cable, Radio, Sw ProductDevice Manufacture & Software Product: Server, CPE, Router, Modem, Cable, Radio, Sw Product

Infrastructure Sharing Service Provider Fibers, Radio Channel, tower, BTS, ducting, Data Center,

server

Infrastructure Sharing Service Provider Fibers, Radio Channel, tower, BTS, ducting, Data Center,

server

Content/App Service ProviderWeb social, market place, ecommerce, search, advertising, email, chat,

voice, Everything as a Service

Content/App Service ProviderWeb social, market place, ecommerce, search, advertising, email, chat,

voice, Everything as a Service

Connectivity Service Provider (Virtual Network/ non Infrastructure)

Telephony, Internet, vpn

Connectivity Service Provider (Virtual Network/ non Infrastructure)

Telephony, Internet, vpnInfrastructure Consolidation for national efficiency Growing market wholesalers, Economies of scale infrastructure business cost per service is lower, avoid duplication of infrastructure , incentive for infrastructure provider

Granting special incentives to manufacturing industries of ICT devices and software .Availability of shared facilities necessary to grow the manufacturing industry.

Grow new service industries,The diversity and competition in ICT services, not infrastructure competition. Provision of services without having to build infrastructure

Pushing the affordable availability of ecosystem services, to encourage the acceleration of ICT users

Capex based Cost based Price

Creative Based value based price

National Focuses

infrastructure sharing can be effectively leveraged to roll-out services at faster speed and at affordable cost.

Cloud ServicesEverything as a services

Cloud ServicesEverything as a services

Conclusion 1. Indonesia has a unique geography and demography, and have an impact

on the unique challenges for the deployment of ICT2. The deployment of ICT in rural areas, require innovations that produce

affordable and appropriate services for Indonesia rural3. A cheaper service with better performance of services in rural areas, can

be done by building a sustainable business model among the partners4. To get an affordable and effective ICT services , we need to develop

industrial model of sharing infrastructure, operation sharing, and encouraging the growth of content and applications industry in the cloud

5. Cloud service is an appropriate ICT model for rural

Thank You……with the benefit of ICT let us prosper together…..