IDC Forecast For Telco On 2008

WW Telecom Services Predictions for 2008

The IDC team then revealed their telecom services predictions for 2008. The main point made is that 2008 will be another year of transformation for service providers as they struggle to make sense of a changing world. Here are IDC's predictions for Telecom Service Providers.

1. New telecom business models will gain ground in 2008
2. Tier 2 network operators get bigger and go up-market in 2008
3. Cable MSOs will take market share in the small and mid-sized business market
4. Resurgence of satellite in consumer multi-play
5. The truth of unified communications is revealed
6. Telecom operators will promote consumer VOIP
7. Content Delivery Networks build momentum and become key components of the digital marketplace ecosystem
8. Carriers will begin to develop clearer messaging around network-IT convergence
9. Major shift in the role of 'user platforms' due to increasing adoption of IP communications
10. FMC is put to the test as solutions mature beyond introductory offers

Worldwide Telecommunications Infrastructure 2008 Top Ten Predictions

The IDC team then presented their top ten predictions for the infrastructure side of the telecommunications industry.

1. Video distribution will be the biggest factor driving network consolidation to all-IP networks
2. Targeted and personalized advertising will drive telecom and IT equipment into provider networks and data centers
3. Content provider networks will become increasingly important
4. WiMAX will continue to build despite the challenges at Sprint while WiFi mesh re-calibrates
5. Cellular technologies will remain the dominant wireless medium, with 3G and next generation road maps taking center stage
6. Demand for OSS/BSS professional services will grow as operators execute their network transformation projects
7. Professional networking service opportunities in emerging telecom markets will continue to grow faster than in developed, or more mature, telecom markets
8. Telecom business model transformation services will become a key differentiator for equipment vendors
9. OSS and billing will expand beyond the back office with SDP and Enterprise integration
10. IT technology will transform telecommunications infrastructure

2008 Growth Markets

Markets that are growing

• Wimax
• Ethernet access devices
• Video Infrastructure
• Softswitches and gateways
• xPON growing all over the world.
• Carrier Ethernet
• Metro WDM
• IP Routing

Decreasing markets include TDM, ATM, SONET/SDH, and DLC

Indonesia Telco Interconnection Rates For 2008

On February 4th 2008; BRTI has announced their new 'cost-based' interconnection rates. The rates are given in IDR based on per minute of call.

Wireline and Fixed Wireless Access

No.	Call Type For Wireline and Fixed Wireless Access	Existing	2008
1.	Originating interconnected – Local (Fixed- WL to OLO fixed)	73	73
2.	Originating interconnected – Local (Fixed- WL to OLO mobile)	152	203
3.	Originating interconnected – Local (Fixed- WL to OLO satellite)	564	204
4.	Originating interconnected – Local (Fixed- WL to OLO VoIP)	185	299
5.	Originating interconnected – Long Distance (Fixed - WL to OLO fixed)	569	560
6.	Originating interconnected – Long Distance (Fixed- WL to OLO mobile	850	626
7.	Originating interconnected – Long Distance (Fixed- WL to OLO satellite)	564	613
8.	Originating interconnected – International (Fixed- WL to OLO international)	549	612
9.	Terminating interconnected – Local (OLO fixed to Fixed-WL)	73	73
10.	Terminating interconnected – Local (OLO mobile to Fixed-WL)	152	203
11.	Terminating interconnected – Local (OLO satellite to Fixed-WL)	564	204
12.	Terminating interconnected – Local (OLO VoIP to Fixed-WL)	185	299
13.	Terminating interconnected – Long Distance (OLO fixed to Fixed-WL)	569	560
14.	Terminating interconnected – Long Distance (OLO mobile to Fixed-WL)	850	626
15.	Terminating interconnected – Long Distance (OLO satellite to Fixed-WL)	564	613
16.	Terminating interconnected – International (OLO international to Fixed-WL)	549	612
17.	Transit Local (OLO to Fixed-WL to OLO)	92	69
18.	Transit Long Distance (OLO to Fixed-WL to OLO)	336	295
19.	Transit to IGW (OLO to Fixed-WL to OLO)	355	316

Interconnection rate for cellular / mobile call

No.	Mobile Service Call Type	Existing	2008
1.	Originating interconnected voice – Local (to fixed)	361	261
2.	Originating interconnected voice – Local (to mobile)	449	261
3.	Originating interconnected voice – Local (to satellite)	574	261
4.	Originating interconnected voice – Long Distance (to fixed)	471	380
5.	Originating interconnected voice – Long Distance (to mobile)	622	493
6.	Originating interconnected voice – Long Distance (to satellite)	851	501
7.	Originating interconnected voice – International (to international)	510	498
8.	Terminating interconnected voice – Local (from fixed)	361	261
9.	Terminating interconnected voice – Local (from mobile)	449	261
10.	Terminating interconnected voice – Local (from satellite)	574	261
11.	Terminating interconnected voice – Long Distance (from fixed)	471	380
12.	Terminating interconnected voice – Long Distance (from mobile)	622	493
13.	Terminating interconnected voice – Long Distance (from satellite)	851	501
14.	Terminating interconnected voice – International (from international)	510	498

The new interconnection tariffs will be applicable on April 1st 2008 onward.

In summary; the tariffs in general are being lowered... expect much lowered inter and intra operator rates in 2008, as the price war will continue to intensify!

Good news for customers while the operators will obviously expect a lower ARPU thus be more aggressive on selling their 'minutes' and improved their network capacity.

Indosat Is Selling Its BTS Towers

News has it that Indosat has sold 7000 units (from approx 9.413) of their Base Transceiver Station (BTS). The tender is supposedly being held on December 2007, with PT Indonesian Tower, PT Mahkota Teknologi (Emtek) and PT Protelindo as bidders. It was also reported that only Emtek and Protelindo still remains on the race.

Rumour has it that the winner has already been 'fixed' for Emtek. And currently Emtek is finalizing for 'coordination contract' with Asia Tower International Singapore (or Tower Asia Pte Ltd??). Asia Tower / Tower Asia is a 'subsidiary' company of Temasek Holding Singapore which is one of the major owner of Indosat itself.

Commenting on this event; a member of BRTI, Kamilov Sagala said "there is a possibility that Asia Tower will put a 'premium price' for its tower for rent by Indosat". Responding to this issue, Indosat's spokeperson; Adita Irawati said "the tender is currently being 're-considered'. and there hasn't been any definite decision from Indosat's management team".

Let's see how the deal really goes...

Telkomsel vs Bharti vs Indosat vs XL : Mobile Operator Benchmark 2007

I'm being bombarded by relentless dogma about how Bharti Airtel is 'a role model' of astonishing telecommunications operator on hyper-growth market (e.g: India, Indonesia etc). Is it fact or myth? Let's deep dive into it, the figure below shows how is Bharti Airtel is doing compared to other mobile operators in Indonesia such as Telkomsel, Indosat and Excelcomindo (XL).


To keep the "competition" fair and square, I've limit the numbers on each of the respective contestants to be focusing on the mobile services only. The figures are taken from each of the respective company's published financial and operational report on Q3 2007 (9-months of operation). You can click on the figure below for more details.






It seems that Bharti Airtel does have the highest gross operating revenue ($3.9 B) and the highest customer / subscriber base (55 Mill). Trailing behind (in this benchmark contest) is Indonesia's (and ASEAN) largest mobile operator; Telkomsel with $3.3 B on gr. operating revenue and 45 Mill subscriber base.


Yet Telkomsel seems to beat Bharti Airtel on 'business operation efficiency'. Telkomsel has the lowest opex / revenue ratio (45.25%) compared with Bharti (64.71%). Excelcomindo (XL) came up second with 52.24% and Indosat earn the 'honourary' last place with (74.41%).


Telkomsel continue to leapfrog Bharti and also their own national competitors (Indosat and XL) on many other business aspects. The most notable are their 'head-count efficiency' with only 4037 heads on their payroll. Adding also that Bharti is known to have outsourced their IT to IBM with over 1500 people managing their IT environment, yet continue to maintain 8346 people on their payroll.


Another interesting fact; Excelcomindo (XL) have overlapped Indosat in terms of number of BTS. Based on the latest 2007 data; they've already deployed 9947 BTS compared to Indosat's 9413. Although they're still far away from the champion (Telkomsel) with 22.167 BTS.


On the bottom line; The year 2007, seems to be a very good year for Telkomsel. They've continue coming strong with 55% on national revenue share. I might guess that unless Indosat is (finally) shaping up, they will be overlapped by Excelcomindo (XL) in not so very distant future on national revenue share. Both share 16% and 10% of Indonesia's mobile services revenue-pie respectively.

More info can be found on each of the operator's website:

Telkomsel: http://www.telkomsel.co.id/
Bharti Airtel: http://www.airtel.in/
Indosat: http://www.indosat.com/
Excelcomindo (XL) : http://www.xl.co.id/


Peace and God Bless