Indonesia ICT Institute again presents a monthly newsletter to meet all readers who want to know the development of ICT in Indonesia last month.

December issue would be the ultimate edition for this year since the turn of the year has had its day, and the beginning of this month we also plan to bring information about ICT Indonesia more complete in the form of an e-magazine, although the newsletter will still be present to meet all readers.

In this edition, we raise some issues drawing attention primarily free decision for Telkomsel from bankruptcy by the Supreme Court, as well as plans to change the rules of implementation of the Premium SMS to content services. Happy reading.

Heru Sutadi Executive Director

3rd Edition 1st Year December 2012

Indonesia ICT Institute Research . Empowerment . Discussion

New Regulation for Content The Government has issued a Draft Ministerial Decree on the Implementation of Content Services. New regulation is a revision of the Ministerial Decree No. 1/2009. How is it?

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From Editor

Do you know from which countries telecommunication devices come to Indonesia? Based on data from Ministry of Communications and Information Technology, in 2011 devices to be tested and then traded in Indonesia come from China with 2275 devices (75% of the

3032 total), followed by Japan with 137 and Taiwan with 108 devices.

Telkomsel Free from Bankruptcy

Telkomsel eventually acquitted by the Supreme Court (MA) from a position of bankruptcy, as already decided by the Commercial Court, last September. As you know, bankrupt decision issued by Central Jakarta Commercial Court to Telkomsel following a business dispute between Telkomsel and PT Prima Jaya Informatika (PJI) for Prima card.

Agreements related to cards and vouchers Prima signed on June 1, 2011 which originated from a memorandum of understanding (MoU) between Telkomsel with Yayasan Olahraga Indonesia –Indonesia Athletes Foundation (YOI). With this agreement, Telkomsel authorizes the YOI to sell prime cards and recharge vouchers. To execute the MoU, YOI then pointed PJI. In cooperation agreement stated that PJI are targeted to sell 10 million cards, and 120 million prime recharge voucher in the one of a year.

But after a year, Telkomsel evaluate PJI and decide that PJI unable to meet the target. So then, there was the same termination. Not accept the decision of Telkomsel, PJI sue Telkomsel to the court to decide later Telkomsel Bankruptcy Court. Beside PJI another partner Extent Media did the samething. Free from bankruptcy is final decision until PJI has another new evidence so they can ask Supreme Court to reconsider previous decision.

Market Review Reviewing how the development of Big

Data in Indonesia, including what kind of issues became the challenges

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Ministry of Communications and Information Technology has set the funds raised in the ICT Fund to build infrastructure in eastern part of Indonesia. ICT Fund is a kind of subsidy for operational funding provided to build telecommunications facilities in non-commercial areas.

Background to the ICT Fund, among others, is that the government is aware of the disparity or gap between the East and the West, where for the West region has a lot of fiber optic network, while the East is still empty.

The business model of the ICT Fund scheme for Palapa Ring project is through a tender conducted in two stages. The first tender held related to the construction of a fiber optic network, and the second tender conducted to determine the pattern of network operators “joint partner".

Meanwhile, the Ministry of Finance confirmed that fund ICT funds reached Rp 5 trillion already be used for the development of communication technology infrastructure across Indonesia. The mechanism of ICT Fund is different viability gap fund (VGF), so according Ministry of Finance, Ministry of Communications and Information Technology can already execute with existing mechanisms. Basically, ICT Fund is USO Fund that taken 1.25% from operators gross revenue.

In Which Frequency LTE will Be Allocated?

LTE ecosystem in Indonesia is not yet formed. This is what makes LTE can not be adopted immediately. One problem is the regulation governing the living spaces in the frequency regulation where LTE will be placed. The government plans to deploy LTE at 2.3 GHz.

Indeed, the frequency of 700 MHz can be used if there is an acceleration digitlisasi TV to not have to wait for 2018. Refarming 1800 MHz can also be done with the realignment and balance carrier frequency allocation.

A Glimpse of ICT Development in Indonesia Contribution communications subsector (Post and Telecommunications) in the country's economy is still relatively small, but it is likely to increase. Take a look, if in 2007 contribution this sector to GDP just 2.91%, but rising to 3.19% in 2011. The important thing is this subsector growth turns over even the highest compared to other sub-sectors or sectors, which the trend has declined. In the year 2012 and the years ahead, it is estimated contribution of communication will increase following widespread use of telecommuni-cations resources, an increasingly rapid development of technology, as well as the more open public access to the use of information technology. Indonesia ICT Institute believe this sector will be pillar for economic growth especially in broadband era.

Table ICT contribution to the Gross Domestic Product (GDP) which shows that although small, the contribution of

the communications sector increased in the last four years than other sectors that tend to decline

(Source: Ministry of Communication and Information Technology, 2011, data is processed)

ICT Fund will be Used to Build Fiber Optics

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Content Regulation in the Future

After a delay of more than a year, the government finally issued a Draft Regulation of the Minister of Communications and Information Technology to replace Minister Decree No. 1/2009 regarding the Implementation and Delivery Premium Short Messaging Service (SMS) and SMS Broadcast. As we know, so many complaints in July 2011 and, where cash deposit prepaid card customers of mobile telecommunications is reduced. Where one urging, including committee work presented for this case in the Commission I of the House of Representatives, is the need for improvement of the rule that had existed.

Comparing to the Ministerial Decree No. 1/2009,

this new draft changed the title to the Operation of

Services Providing Content On Mobile

Telecommunications Networks and Fixed Wireless

Access. Another difference is that if Ministerial

Decree No. 1 Year 2009 stated that premium

messaging service providers must have sufficient

permissions in the registration form before the

operation, in the new Ministerial Decree is much

more stringent licensing through three stages:

principle license, operation test and then commercial

license.

In this new regulation also stipulates that service

providers are prohibited to provide information or

offer content that contains: a trap sentence,

misleading information, coercion to receive content,

and or information contrary to the provisions of the

legislation.

This draft of Ministerial Decree also regulates the

tariff content services that consist of network cost,

content provider cost and content it self. Still not

clear how regulator set the maximum tariff for

content services. Regarding tariff, government wants

there is no charge in content that offer prizes. Its

mean the cost is paid by content or network provider.

Even this draft very complete, but unfortunately in

some text still there are strikethrough text. This can

be made some misinterpretation for the public when

they want to give the input or criticize this draft.

Debate discussion regarding this draft will certainly

be hard. Such rules about opt-in for SMS broadcast

that correlated to forward mobile advertising service,

numbering arrangements and dispute resolution.

Telecom operators have interests, content service

providers also have interests, while the public and the

government is also concerned to this rule in the

future. Who will win, of course, will depend on the

final outcome of the Ministerail Decree after it

signed by the Minister of Communication and

Information Technology

Beside all of that, the most crucial is how fast the rule

was adopted. Therefore, people need strong

protection from naughty content players which take

deposit money from customer, in the other side the

industry has been waiting new rules set by the

government to follow.

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Big Data Era in Indonesia Last November, Indonesia Cloud Forum held a seminar on Big Data with titled "Trend 2nd Round: Infrastructure and Demand Challenges". Besides the issue of Big Data on the rise, the trend in the use of communications data daily activities, making traffic and data management becomes a interesting issue. Big Data is being so hot conversation in the industry. Not just a mere discourse, but this is a real phenomenon. We can see that growth ofBig Data is not from structured data types, but from unstructured data. Unstructured data that is considered not have a hierarchy of relational and do not fit the traditional database. Unstructured data includes everything, ranging from metadata Facebook photos to the tracking of millions of RFID in the retail sector. Store and manage large amounts of data is a challenge. For conditions in Indonesia, is currently heading the era of Big Data. All sectors starting need large capacity storage needs. One of the factors driving Big Data in Indonesia is increasingly high adoption of cloud computing. Thus, just a matter of time to explode. It happened, not just because it encouraged the growth of social media users, but also data from the enterprise data, from client, products, until trade transactions. Seeing this phenomenon, Big Data may be a great business opportunity if anticipated accurately and quickly, but it can be a disaster when infrastructure providers and telecom operators fail or too late to anticipate. Regarding Big Data, Indonesia ICT Institute based study found that unconsciously Big Data trends already familiar to the users so far. An example is the fact that more and more users connect Facebook, Twitter, and other social networks to communicate. Noted, Indonesia ranks fourth in the world for Facebook users (50.5 million) and Twitter (19.5 million). Besides social networking, Internet users in Indonesia as well as active in a number of forums, for example is Kaskus (3.7 million members by posting 463.6 billion). Furthermore, there are more than 1.9 million uploaded photo to Instagram with members of Indonesia more than 1,500. With the number of mobile phone users until third quarter (Q3) 2012 reached 262.6 million (exceeding the population 237.5 million) and the user data / Internet of five mobile operators reach 115.7 million users, it is quite possible that the communication traffic that’s already a Big Data will be booming in the near future.

Study About Big Data

Based on the study of Indonesia ICT Institute survey of 100 respondents in Greater Jakarta, we got the result that Big Data is understood as a large data (32%) and the data were derived from social media (28%) or log files (23%). The majority of respondents claimed they have used of Big Data (73%) and will use (19%).

The majority of respondents also noted that Big Data will continue to grow (100%) in Indonesia, citing factors based on the exchange of information or data and the greater increase, new applications such as social media and application store, as well as the addition of users log files, applications or exchange of information.

The most challenges of Big Data in Indonesia is infrastructure, and followed by privacy and security, network quality and education.

Interestingly, when in other countries here only 4V data dimension (Volume, Velocity, Variety and Veracity), in Indonesia its added become 5V with Victory, who is leading the development Big Data business will be the winner. Because of that, education and socialization of big data needs to be done

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From the draft, we can see that the institute for terrestrial digital television broadcasting will consist of Broadcasting Program Operator/Provider. and Broadcasting Multiplexing Operator.

Broadcasting Program Operator is an institution that organizes free to air digital television terrestrial broadcasting, which administers the program broadcast to the public in the area of broadcasting services through broadcast channels or slots in the radio frequency channel, while Broadcasting Multiplexing Operator broadcast programs of several Broadcasting Program Operator. Its mean Broadcasting Multiplexing Operator just provide network that can be used by some Broadcasting Program Provider.

Broadcasting Program Provider will consist of Television Indonesia as Public Broadcaster, Local Public Broadcaster, Private Broadcaster and Community Broadcaster. Establishment of broadcaster should be in conformity with the provisions of laws and regulations governing the procedures for the establishment of broadcaster.

Program broadcaster in organizing and providing

broadcasting shall obtain license from the Minister. The licensing procedure for program broadcaster mus

follow procedure based on Ministerial Decree No. 22.2011 regarding the Implementation of Free to air

Digital Television Terrestrial Broadcasting Reception.

Program Provider liable to pay license fee in accordance with the provisions of the

Broadcasting Organisation. The rental fee or slot channels broadcast programs paid by the program

broadcaster to multiplexer operator includes the cost of frequency usage rights.

Related to this rule, it is clear that the government is still going ahead with the TV digitalization

program even parliament still disagree and prefer to wait revision of Broadcasting Law No.

32/2002. And this Ministerial Decree actually is a new arrangements some regulation that still not

anticipated in Broadcasting Act, 10 years ago. Broadcasting Act No. 32/2002 just mention about

analog broadcasting.

For real industry, the faster the process of

digitalization, will be better so unused frequencies (digital dividend) can be allocated for the

development of the telecommunications industry that is currently in frequency crisis, to meet the

needs and quality of broadband data services and the development of new technologies that are

hungry for bandwidth, such as Long Term Evolution technology.

In several countries, LTE allocated in 700 MHZ,

1800 MHZ, 2.3 GHz or 2.6 GHz. For Indonesian case, to put LTE in 1800 MHz it need to refarm

this band, and rearrange the spectrum due to uncontigous frequency for some operators and

unbalance frequency allocation between the operator. In 2.3 GHz it can be used for TD-LTE

not cellular operator not really interest with this band. And for 700 MHz still waiting digitalization

TV program. To use this band, Government have to accelerate this program not until 2018.

Government will Set Licensing for Digital Broadcasting Soon

To implement the provisions of Article 9, paragraph 2 of the Ministry of Communication and Information Technology Decree No. 22 Year 2011 regarding the Implementation of Free to air Digital Television Terrestrial Broadcasting Reception, then the government will issue new regulations about Licensing Procedures and Requirements for Implementation of Digital Terresterial Broadcasting in the new Ministerial Decree.

3rd Edition 1st Year

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By the end of November, although Telkomsel has been won by the Supreme Court from the decision of the bankruptcy, the government has not opened the selection process of adding blocks of 2.1 GHz or 3G. However, the government has said it will announce the opening selection in mid-December. In the initial document procedures for selection, it took two months since the announcement of the opening of the selection to determine who the winner selection.

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The Government has announced that the tender Broadband Wireless Access (BWA) to fill the abandoned zones winner next year, in 2013. Tender will be made after the selection process adding 3G is completed.

CONTACT US:

If you have any question, input or critic, please do not hesitate to

contact us by email to editor@idicti.com

December 2012