700 MHz Digital Dividend Acceleration...

Ditjen SDPPI – Kementerian Kominfo

Building The Mobile Broadband Ecosystem for The 700MHz APT Band at GSMA Mobile Expo 2013

700 MHz Digital Dividend

Acceleration Study

Dr. DENNY SETIAWAN Deputy Director, Fixed and Land Mobile Services

Directorate of Spectrum Policy and Planning

Director General of Resources and Standard (DG SDPPI)

Ministry of Communication and IT

Shanghai, 27 June 2013

INFRASTRUCTURE SUPPLY GOAL:

National Mid-term Development Plan (RPJMN) : 30% coverage

population has broadband access.

Broadband access:

• > 256 kbps (OECD, White Paper BWA 2008).

• > 512 kbps (ASEAN ICT Masterplan) .

88% District Capitals of 33 Provinces in Indonesia

Master Plan of Acceleration of Indonesia Economy Development

Acceleration (MP3EI) 7 corridor growth areas, 50% districts

(Kabupaten/Kota) by the year 2014.

National Broadband Plan Policy (2009-2014) 28/06/2013

Ditjen SDPPI – Kementerian Kominfo 2

MP3EI: Master Plan of Economic Development Growth Area Acceleration 2025, 7 corridors in major islands

2012 2015 2020

AREA-1 256 kbps 2 Mbps 4 Mbps

AREA-2 256 kbps 1 Mbps 2 Mbps

AREA-3 256 kbps 512 kbps 1 Mbps

AREA-4 256 kbps 256 kbps 512 kbps

Population : 234.2 million No of villages `77,000 No of islands 17,508

Source : WG 4G Indonesia 3

Draft of Indonesia National Broadband Plan

Palapa Ring (Initial concept)

Total Underwater cable 35.280km

Total land cable 21.807 km

Palapa Ring First Stage Total new FO > 10.000 km Total cost : 300 juta US dolar

Source: MCIT Indonesia

PALAPA RING, National Fiber Optic Backbone and Backhaul

(c) Ministry of Communication and Information technology of Republic of Indonesia

Implementing PALAPA RING as a broadband national backbone and backhaul

Services Unit 2004 2009 2010 2014 *

1. Telephone

Fixed Line Unit 8,703,218 8,423,973 8,429,180 8,429,180

Mobile Line Unit 32,009,688 190,062,615 200,636,587 222,853,663

Total Line Unit 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 Person 11,226,143 30,000,000 45,000,000 130,000,000

3. Broadband

Subscriber Person 84,900 4,520,000 7,290,000 17,000,000

*) Estimated

Ref : MASTEL, 2012 ICT Outlook 5 INDONESIA DEPENDS HEAVILY ON MOBILE BROADBAND

INDONESIA ICT STATISTIC

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Impact of Broadband Towards Social and Economy

Source: ITU, 2012

• Increase of 10% broadband penetration may reduce 0.06% unemployment rate (Brazil).

• Increase of 10% broadband penetration may increase 0.09 % GDP (Chile).

• Increase of 1% “household” broadband penetration may reduce 8.61% unemployment rate (Indonesia).

Source: Impact broadband to the economy (ITU study) 2012

World Bank Study 1,38 persen

increase of GDP for each 10 %

increase of broadband

penetration.

In Indonesia, with 10%

average penetration of 3G

services (2008-2011),

additional of 10 of 3G services

layanan 3G per 100

connection, can increase 1.5%

GDP per capita

Source : GICT Dept. World Bank.

Source: Deloitte 2011-GSMA

Spectrum Crunch Exponential growth of data traffic (Ipad, Iphone, tablet,

android, etc)

Demand spectrum mobile broadband:

ITU-R Report M.2078, need additional 1280 – 1700 MHz bandwidth by

the year of 2020

FCC-US and OFCOM-UK : need additional 500 MHz by the year 2020

Australia: need additional 150 MHz in year 2015, additional 150 MHz in

year 2020. Currently 800 MHz

Indonesia: currently is only around 425 MHz effective bandwidth.

Band < 1 GHz (including Digital Dividend 700 MHz most optimum option of capacity and coverage)

Band > 1 GHz (in major market areas), including WiFi class-licensed for off-loading

Ditjen SDPPI – Kementerian Kominfo

28/06/2013

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Spectrum Crunch (continued) Current situation:

Unbalanced bandwidth distribution :

• CDMA operators : 4 Operator @ < 2 x 5 MHz, 1 operator 2 x 11.9 MHz

• GSM/UMTS/HSPA operators

– 2 operator @ 2 x 40 MHz, 2 operator @ 2 x 25 MHz, 1 operator 1 x 20

MHz

– 2 operator do not have 900 MHz (coverage)

– In 1800 MHz and 2.1 GHz, some portion of band do not contiguous

Mixed Band Plan: GSM900 vs CDMA 850, UMTS 2100 vs PCS1900

To fulfill the increase data traffic demand:

Increasing number of tower

Bandwidth increase

Increasing bit efficiency of technology (2G->3G->4G)

Ecosystem is very important (3GPP, LTE, IEEE, global standard, etc)

Ditjen SDPPI – Kementerian Kominfo

28/06/2013

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Proposed Policy and Strategy

Encouraging Below 1 GHz Mobile Broadband

4 CDMA 850 MHz operators @ 5 MHz...(do not support enough

capacity for Mobile Broadband, while it is very good in coverage

compared the other higher frequencies).

Encourage HSPA 900 MHz spectrum refarming deployment (by

allowing technology neutrality)

Encourage Network Sharing to improve efficiency on infrastructure, but still maintain competition in services

Encourage more flexible use of spectrum: MVNO, spectrum sharing, infrastructure sharing, spectrum swap, spectrum aggregate, spectrum leasing etc

Need to improve policy and regulation

28/06/2013

Ditjen SDPPI – Kementerian Kominfo 9

Source : Author

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Spectrum Crisis in relation with Capex and Opex of Networks

To resolve “spectrum crunch“ of

increasingly significant traffic of mobile

broadband, three solutions are provided:

• Additional Spectrum Bandwidth

• Increase Efficiency of Spectrum with the use of

technology upgrade with the latest technology

• Increasing number of tower site

The bigger spectrum provided, the

bigger saving of capex and opex of

Mobile Broadband provisions

Source : Pemodelan Akselerasi Implementasi Digital Dividend di Indonesia (Denny Setiawan, 2013)

MOBILE BROADBAND EVOLUTION PATH TOWARDS LTE

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Semua teknologi selular, baik GSM, CDMA, maupun Wimax pada akhirnya akan

berevolusi menjadi menuju satu teknologi masa depan : LTE (Long Term Evolution)

Mobile Broadband Band (Existing and Future Potential)

Ditjen SDPPI – Kementerian Kominfo

Band 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 Mobile Cellular (GSM)

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

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700 MHz Digital Dividend

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192 MHz

TV Analog Free To Air (FTA) Reception

478 806 MHz 328 MHz

112 MHz

PROSES DIGITALISASI PENYIARAN

ANALOG TV

TV Digital Terestrial Free To Air (FTA) Reception

526 694

Future DTV

DIGITAL DIVIDEND

478 806 MHz

DIGITAL TV

• LTE 700 MHz will be very important for Broadband development acceleration in 7 Corridors Areas MP3EI particulary Rural Areas with only using the existing 2G sites

• Unfortunately, it’s only available after Digital Switchover at the end of 2017

Source : Pemodelan Akselerasi Implementasi Digital Dividend di Indonesia (Denny Setiawan, DTE, FT-UI, 2013)

DIGITAL DIVIDEND 700 MHz

Digital Switchover Schedule Worldwide

Sumber: OFCOM (2011). International Communications Market Report.

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DVB-T2 MPEG4 IMPLEMENTATION

Digital TV Quality Compression Range (Mbps) Typical Bitrate

(Mbps)

SDTV MPEG-2 2 to 5 3

SDTV MPEG-4 1.5 to 2 1,5

HDTV MPEG-2 15 to 20 16

HDTV MPEG-4 5 to 10 8

DVB-T2

IMPLEMENTATION

Fixed rooptop reception

MFN (UK Mode)

Fixed rooptop reception

limited area SFN (GE06

allotment)

Fixed rooptop reception

large area SFN

1 3a 3b

Bandwidth 8 MHz 8 MHz 8 MHz

FFT mode 32k 32k 32k

Carrier mode Extended Extended Extended

Scattered Pilot Pattern PP7 PP4 PP2

Guard Interval 1/128 (28 ms) 1/16 (224 ms) 1/8 (448 ms)

Modulation 256-QAM 256-QAM 256-QAM

Code rate 0,67 0,67 0,67

C/N 18.9 dB 19.6 dB 20.0 dB

Data Rate 40.2 Mbps 37 Mbps 35.5 Mbps

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Market Share of Analog TV Broadcaster Market Share Major Commercial

National TV only Market Share of all TV Broadcaster

RCTI 16,7% 16,3%

SCTV 15,7% 15,3%

Trans7 13,7% 13,4%

MNCTV 11,8% 11,5%

Trans 7 9,8% 9,6%

IVM 9,8% 9,6%

Global TV 7,8% 7,6%

ANTV 6,9% 6,7%

tvOne 4,9% 4,8%

MetroTV 2,9% 2,9%

TV Lokal 2,50%

Total 100% 100,0%

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Source : Pemodelan Akselerasi Implementasi Digital Dividend di Indonesia (Denny Setiawan, DTE, FT-UI, 2013)

TV Receiver Penetration Rate in Indonesia

TV Receiver Penetration Rate: 57% Household,

Number of Household in Indonesia: 61,2 million HH (based on data from Bureau Statitics in year 2010)

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Source : Pemodelan Akselerasi Implementasi Digital Dividend di Indonesia (Denny Setiawan, DTE, FT-UI, 2013)

Schedule of Digital Switchover in Indonesia (1/2)

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Source : Pemodelan Akselerasi Implementasi Digital Dividend di Indonesia (Denny Setiawan, DTE, FT-UI, 2013)

Schedule of Digital Switchover in Indonesia (2/2)

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Source : Pemodelan Akselerasi Implementasi Digital Dividend di Indonesia (Denny Setiawan, DTE, FT-UI, 2013)

DIGITAL TV INDUSTRY MODEL (in one service area)

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Digital TV Multiplex Licensing Areas (in 15 Regional Zones)

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Digital TV Service Area and Digital TV Multiplex License Areas

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Digital Switchover Schedule and Number of TV License in each area

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Broadcasting Saving Cost Benchmarking of Total Capex Opex Mux

Benchmarking of Num of TV Program Channel

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*In Million Rupiah, 1USD=9900Rupiah(IDR)

Broadcasting Saving Cost

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Benchmarking of Capex Opex per TV Broadcasting Programme Channel

Broadcasting Saving Cost (Electricity)

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Benchmarking of Electricity Consumption for 700 TV Tx Nationwide

(in Rp. Millions, 1USD=9,900 Rupiah(IDR))

Problems and Facts

Delaying the Digital Switch-over and Licensing 700 MHz for Mobile Broadband until year 2018 compared with the Facilitating Digital Dividend in the end of 2014 will be very significantly impact the social and economy growth of Indonesia (BCG Report, 2010)

Decreas of GDP increase projection : 54%

Decrease of Government Income from Tax and others ; 69%

Decrease of Job Creation : 78%

From All Spectrum Licensing Fess collected, the fund proportion given back for the ICT industry currently only maximum 6,75% of total almost Rp. 10 Triliun (1 USD Billion). Most of 90% Spectrum Licensing Fees collected from Mobile Cellular license fess.

In US, there are initiative from FCC to release more spectrum for Mobile Broadband with the Incentive Auction, compensating the incumbent with the portion of the result of the spectrum auction fees.

Supreme Court has decided to review the Ministrial Decree 22/2011 about the Free to Air Digital TV, make more complicated, step backward

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Proposed Strategy Clearing up both 700 MHz with intervention from Government

Utilizing the satellite infrastructure for distribution with cheap free-to-air Satellite

Distribution in non major city commercial areas operated by Independent Multiplex

700 MHz Digital Switchover Acceleration

Looking for the progress and development of Digital TV Migration in Zone 1 and Zone

2 (Java, Bali islands Batam and Sumatera)

If the problem is not resolved, the alternative method is to establish Independen

Multiplex, subsidy set-top-box, etc.

Options:

Government procurement, Build transfer operation to the indepeden Multiplex (both

satellite and terrestrial)...NBNCo model in Australia

Incentive Auction....Compensating the incumbent with the fund provided by spectrum

auction in 700 MHz and other band.

Joint announment the commitment to align with the 700 MHz spectrum band (with AITI, MCMC, IDA), 18 June 2013-CommunicAsia Singapore

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Further action

Further study is required

Need more benchmark of success story of collaboration broadcaster and telco in convergence, in order to convince broadcaster that they will get more oportunity

Any suggestion is welcome

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Ditjen SDPPI – Kementerian Kominfo

E-mail: denny@postel.go.id

denysetia@gmail.com