INDONESIA BROADBAND PLAN Dr. Ir. Lukita Dinarsyah Tuwo, MA

Vice Minister of National Development Planning/Vice Chairman of BAPPENAS presented at Meaningful Broadband Indonesia Congress

Jakarta, 13 November 2013

OUTLINE

BACKGROUND

THE CONCEPT OF INDONESIA BROADBAND PLAN

CLOSING

1

2

3

2

BACKGROUND

3

Global Leaders on Broadband: UN Conference on Sustainable Development (Rio+20), June 2012

We recognize that information and communication technology (ICT) is facilitating the flow of information between governments and the public. In this regard, it is essential to work toward improved access to ICT, especially broadband network and services, and bridge the digital divide, recognizing the contribution of international cooperation in this regard.

Broadband and Development

Every 10% increase in access to broadband in developing economies, like Indonesia, translates to a 1.38% growth in GDP (source: the World Bank)

Every 10% increase in broadband penetration in a year correlates with 1.5% increase of work productivity in five years (source: Booz & Company)

Every 1% increase of broadband household penetration in Indonesia will decrease unemployment growth by 8.6% points (source: Katz et al)

Participation in the global economy is increasingly dependent on the 21st-century skills which include the ability to use technology and navigate the digital world (source: Broadband Commission). Thus, ICT has become a must in learning process.

Based on the Global Competitiveness Index 2011-2012, there is a correlation of 0.71 between quality of education and availability of internet access (source: Pustekkom, Ministry of Education and Culture)

4

Broadband and Development (contd)

Smart use of ICT can reduce Green House Gas (GHG) emissions by up to 25%. Mobile technology alone could lower GHGs by 2% by 2020. E-commerce could lower energy consumption and GHG emissions by 30% over traditional retails. Teleconferencing and telecomputing could replace air and land travel via video/audio conferences. ICT could potentially save up to 7.8 Gigatons of carbon dioxide emissions by 2020. Shifting newspapers online could potentially save 57.4 million tons of CO2 emissions over the next decade (source: Broadband Commission)

Closing the mobile gender gap and bringing 600 million more women online could increase global GDP by US$ 12-18 billion (source: Broadband Commission)

The cooperation between the Government of Indonesia and United Nations under Global Pulse initiative brings together researchers from the Government, UN, non-governmental organizations, and private sectors to explore the use of big data and real-time analysis methods for social development monitoring and program planning

ICT, specifically broadband, plays increasingly significant roles in development. Broadband has become an integral part of national strategy for development. Incapability to adopt and utilize broadband will leave the nation in exclusion.

Indonesias Call for Broadband

MP3EI Leapfrog:

2025 Vision

The economic masterplan (MP3EI) aims at transforming Indonesia from a US$

700 billion economies in 2010 to that of US$ 4.5 trillion in 2025.

Such transformation will not feasible

without broadband support.

Nations Competitiveness

Indonesia competitiveness has improved in the last eight years, leaping from 57th in 2006/07 to 38th in 2013/14 (source: World

Economic Forum). As an efficiency-driven

economies, Indonesia ICT however has not optimally

contributed to nations competitiveness. Internet users

and fixed broadband subscriptions are among the

lowest. Substantial reforms in ICT

development and smart use of ICT in national development are

required.

Planning Direction for 2015-2019

RPJMN 2015-2019 focuses on strengthening

development by emphasizing the

development of economic competitive advantage

based on natural resources, qualified

human resources, as well as science and

technology. Broadband use in these three platforms will give an edge to the process as

well as the impact of development.

5

- +

The Landscape of Current Broadband Development

6

We fully understand that broadband is not a panacea, a remedy that cures all. There are things to be prepared and done before we can truly

gain the benefit from broadband.

It becomes a mandatory for the Government together with private sectors to unlock the potential of broadband. Without tangible actions,

broadband will remain as possibility but with no real values.

Indonesia Broadband Plan (IBP) provides policies and strategies as well as directions and targets. The document is prepared through a robust

colaboration between the Government, private sectors, and society which includes among others:

Kementerian PPN/ BAPPENAS

Kementerian Koordinator Bidang

Perekonomian

THE CONCEPT OF INDONESIA BROADBAND PLAN (IBP)

7

IBP and Other Planning Documents

Medium Term Nat. Plan (Pres.Regulations)

Medium Term Nat. Plan (Pres.Regulations)

Long-Term National Development Plan (RPJPN)

2005 - 2025

Medium-Term National Development Plan (RPJMN)

Medium Term Nat. Plan (Pres.Regulations)

Medium Term Nat. Plan (Pres.Regulations)

Government Annual Plan (RKP)

MP3EI 2011-2025

Indonesia Broadband Plan

Direction, policies, and strategies for broadband development

Programs/projects required state budget (APBN) support

8

PREREQUISITE

MAIN PILLARS

INDONESIA BROADBAND OBJECTIVES

INDONESIA BROADBAND VISION

INDONESIA VISION 2025

IBP Framework

Independent , progressive,

equal and prosperous

Indonesian society

To support nations transformation towards

becoming developed economies through broadband

use as meta-infrastructure 1. To promote economic growth and nations

competitiveness

2. To support human capital development

3. To preserve nations sovereignty, defense, and integrity

INFRA-STRUCTURE

AND SECURITY

ADOPTION AND UTILIZATION

REGULATORY AND

INSTITUTIONAL FRAMEWORKS

FUNDING

Government leadership, national commitment, multi-sector synergy, and public-private partnership

9

IBP Main Policies

Infrastructure:

Acceleration of broadband infrastructure roll out including in un-served and underserved areas to provide affordable services all over Indonesia

Utilization:

Further adoption and productive use of broadband in government, business, and society

Regulatory Framework: Policies and regulations to induce further market growth and to eliminate unnecessary regulatory cost allowing conducive investment in broadband development

Funding:

Government budget allocation to accelerate broadband development without taking over private sectors role or competing with the operators

10

NATIONAL BROADBAND DEVELOPMENT

1. Supply/Infrastructure: availability, accessibility, affordability

2. Demand/Adoption and Utilization: awareness and ability

Competition in wireline broadband Optimal use of spectrum Optimal use of right of ways Infrastructure sharing Neutral technology Open access Secured network and system

Digital literacy(e-literacy) Aggregating demand, among others:

E-government E-education E-health E-procurement E-logistic

Green ICT and Green with ICT

Optimal use of USO Fund and Non Tax Revenue in ICT sector Public-private partnership

Consolidated planning and budgeting for ICT on national level

Supported by:

3. Funding

Regulatory frameworks to create condusive investment climate Governance and institutional setting for the implementation of Indonesia Broadband Plan

4. Regulatory and Institutional Frameworks

IBP Main Strategies

11

2025 Vision: independent , progressive,

equal and prosperous Indonesian

society

RPJMN 2010-2014: CONNECTIVITY

RPJMN 2015-2019: INNOVATION

RPJMN 2020-2025: TRANSFORMATION

Providing basic connectivity by covering blank spot areas and modernizing ICT infrastructure to accommodate broadband services

Providing broadband services to all kabupaten/kota, schools, and other public facilities;

Strengthening government connectivity by improving government secured network and consolidating data center/warehouse;

Promoting adoption and quality use of broadband

IBP Staging

TARGET 2014

Telephony and internet services are available in all USO areas

Broadband is available in 88% of kabupaten/kota and covers 30% of population

Digital TV covers 35% of population

E-government index: 3.0 out of 4.0

12

2013

Infrastructure Fixed broadband :

15% households (1Mbps) , 30% buildings (100 Mbps), and 5%

population; Mobile broadband :

12% population (512 kbps)

Infrastructure (at least) Fixed broadband :

40%-75% households (2Mbps), 50%-80% buildings (1 Gbps), and 25%

population; Mobile broadband :

75% population (1 Mbps)

2017

Priority Sectors: e-Government; e-education; e-health; e-logistic, e-procurement

IBP Targets 2013 2017*

* Calculation for 2019 targets is ongoing Although IBP provides directions for broadband development until 2025, targets are set every 5 year

13

Acceleration of Broadband Development

Broadband development in Indonesia relies on private sector investment. However, the Government will make intervention, as required, to accelerate broadband development: infrastructure roll out and its meaningful adoption/use.

A careful assessment will be performed to assure efficient and effective resource allocation as well as its impact to the market (whether such intervention will create market failure).

As a start, Government intervention in the form of policy/regulatory and/or funding will be provided for flagship programs.

2012 2015 2025

Government intervention to

accelerate broadband development

14

IBP Flagships 1. Palapa Ring

To provide fiber optic backbone inter-big islands and intra-island reaching to 497 kabupaten/kota by 2015 (ongoing)

2. Shared Duct

To construct a shared pipe/duct to accommodate fiber optics from different operators (final stage of preparation)

3. Government Networks and Consolidated Data Warehouse

To build a secured, dedicated, high-speed government networks and a consolidated data warehouse (finalization of concept)

4. Regional Terrestrial Broadband Piloting in USO areas

To serve as extension of Palapa Ring in USO areas using wireless solution (finalization of concept)

INFRASTRUCTURE

5. USO Fund Reform

To accommodate more extensive use of USO Fund to cover broadband development beyond infrastructure (ongoing)

FUNDING

6. National Digital Literacy Program

To improve ICT literacy nationwide in order to promote adoption and meaningful use of broadband (in preparation)

HUMAN CAPITAL

15

IBP Timeline

16

Drafting of the Indonesia

Broadband Plan (completed)

Jan - May

Jun - Jul Bilateral

meetings with 8 ministries

identified as 5 priority sectors.

2nd public consultation on

utilization. (completed)

Aug - Oct

Finalization of the document

and its launching (ongoing)

Nov - Dec

1st public consultation:

forum and online

(completed)

As a nation, we fully aware of the need for broadband not only to promote more sustainable economic growth, to improve nations competitiveness but also to enrich peoples quality of life.

Indonesias call for broadband is aligned with nations 2025 vision and direction for the next medium-term national development plan (RPJMN 2015-2019) in which economic competitive advantage will be the main focus.

Indonesia Broadband Plan, a document providing direction and guidance for national broadband development, will be intertwined with the next RPJMN. Thus, we are aiming at completing the formulation of IBP at the end of this year.

Extensive infrastructure roll out, smart adoption, debottlenecking regulations, and innovative business model with government budget support are the main ingredients in broadband development.

17

CLOSING

In that context, we recognize the need for the Government to be more actively involved in the broadband development. Therefore, the Government will make intervention, as required, to accelerate broadband development. A careful assessment will be performed to assure efficient and effective resource allocation as well as its impact to the market (whether such intervention will create market failure).

As a start, Government intervention in the form of policy/regulatory and/or funding will be provided for six flagship programs, ranging from (1) infrastructure programs to provide fiber optic backbone networks to kabupaten/kota, shared duct, and government secured networks; (2) funding program to reform the Universal Service Fund allowing development of broadband ecosystem; to (3) capacity building program to improve ICT literacy to enable smart and extensive adoption of broadband.

18

THANK YOU Secretariat of Indonesia Broadband Plan:

Directorate of Energy, Telecommunications, and IT Ministry of National Development Planning/BAPPENAS

Jl. Taman Suropati No.2, Menteng, Jakarta 10310

Tel : (021) 314 9664 Fax : (021) 391 2422

Email : broadband.plan@bappenas.go.id mtayyiba@bappenas.go.id

19