Indonesia’s WiFi Access Innovation Divakar Goswami & Onno Purbo
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Indonesia’s WiFiAccess Innovation
Divakar Goswami& Onno Purbo
Indonesia overview
•World's largest archipelago-17,000 islands
•Poses a challenge in rolling out communication infrastructure and providing access to 241 million inhabitants of Indonesia, 4th most populous country in the world.
Project Objectives
n What are the conditions that gave rise to WiFibecoming the access technology of choice for Internet in Indonesia?
n Can WiFi access innovation in Indonesia be replicated in other developing countries?
n What steps need to be taken for higher Internet growth in Indonesia?
n Will highlight lessons learnt from Indonesian study that have regulatory relevance.
What is WiFi?n Many countries (USA, EU, Indonesia etc.) have
unlicensed portion of 2.4 Ghz (2400 Mhz to 2483.5 Mhz) including use of spread spectrum technology for uncoordinated sharing of band.
n 5Ghz to unlicense or not? 5.8 Ghz suitable for long range communication.
n Industry developed IEEE 802.11 (2Mbps), 802.11b (11Mbps) and 802.11g (54Mbps) standards for high rate data transmission.¨ Advantages: Quick deployment time, low-cost, minimal rights of
way needed, “free” bandwidth.¨ Disadvantage: Prone to interference, weather conditions, steep
range/bandwidth tradeoff, doesn’t offer carrier class reliability.
Internet penetration
10.11823.30.440.020.070.020.01-
50.8847.1760.9734.536.869.643.761.751.03InternetUsers
Broadband users
0.17 0.39 0.4 2.4 3.81
11.95
23.32
33.89
52.49
0
10
20
30
40
50
60
Per 100 inhabitants
Pakis
tanInd
ia
Indon
esia
Thaila
nd
Asia A
vg
Malyas
ia
S. Ko
rea
Hong
Kong
Singa
pore
Internet Subscribers 2003
Internet growth rate comparison
India’s CAGR for an eight-year period between 1998-2005 was 58.4% in comparison with Indonesia’s CAGR during the same period of 35%.
Internet Subscriber Growth: Indonesia & India
10
900
30003300
3800
5550
400 581 667.002 865.706 1087.4281500
5450
0
1000
2000
3000
4000
5000
6000
Year1995
Year1996
Year1997
Year1998
Year1999
Year2000
Year2001
Year2002
Year2003
Year2004
Year2005
India
IndonesiaTh
ou
san
ds
Typical ISP Network
Infrastructure Network
Access Network
Twisted copper pair
ADSL
Dialup
Fiber optic
Link to higher tier ISP
ISP A
ISP B
ISP C
Coax cable
Cable modem
Network Reality-Indonesia
Infrastructure NetworkAccess Network
Neighbourhood Network $35/pm
Corporate Customer $200/pm
UTP CableHouse
School A$4000/pm (Internet link+ international bandwidth)
WiFi 2.4 WiFi 5.8
ISP A
WiFi 2.4
IIX
Ethernet Ring
Microwave
ISP B
ISP C
Ethernet
School B
School C
Wifi 5.8
Uniqueness of Indonesian WiFi
n WiFi deployed in Indonesia but in unique manner:¨ Not inside home; not available for free. ¨ Blurring of access and infrastructure network; used as
backbone; up to curb WiFi, last mile aerial cable.¨Many tiered retailing of Internet service….¨WHY? To recover high Internet retail prices
What gave rise to peculiar access network in Indonesia?
Regulatory environment¨ Non-independent regulator
n DG POSTEL is an unit of the Ministry of Communication & IT n Two regulatory bodies: DG POSTEL & BRTIn BRTI under-staffed, powers under transition, chairman is DG of
POSTEL¨ Exclusivity clauses extending historical monopolies
n Indonesian govt owns 51% share in PT Telkom & 15% in Indosatplus “golden share”
¨ Structure of licenses preventing ISPs from deploying infrastructuren Licenses for Telecom Network & Service providers
¨ No local loop unbundlingn Exclusivity until 2015
¨ No regulation of leased line pricesn Non-regulation of uncompetitive market
Market environment
¨ Lack of competition in infrastructure sector
¨ Resulting in high leased line prices
¨ High international backbone prices
¨ Proliferation of unlicensed “reseller-ISPs”
Competitive Currently 124 ISPs official, 54 unlicensed
Internet service provision
Competitive (Satelindo, Excelkomindo, Telkomsel etc.)
Mobile
Duopoly 1995-2004 (Indosat, Satelindo)
Fixed international
Limited competition (Satelindo)
Fixed wireless local
Exclusive right 1996-2005 PT Telkom
Fixed domestic LD
Exclusive right 1996-2010 PT Telkom
Fixed wirelinelocal
Telecom operations
Telecom services
No competition
Limited competition
Competitive
Annual Leased line prices 2Mbps Link
Data compiled from Lokanathan, lirneasia.net, EU 10th report, interview with Indonesian ISP & Network Service Provider
RatiosIndia EU
1:47.9 1:3.8
RatiosIndia EU1:5.9 1:4.9
US$9,219US$4,802EUBenchmark(Denmark)
US$7,603US$376.00India
US$45,000US$18,000Indonesia
200km2km2Mbps link
Comparison of Internet Prices (monthly) for Business Users in Indonesia & India
0500
1000150020002500300035004000
64 kbps 128 kbps 256 kbps 512 kbps 1 mbps
Bandwidth
US
D$
Indonesia
India
Data from Indonesian ISP provider & BSNL, India
3.9:1US$970US$37761 Mbps
4.2:1US$612US$2596512 Kbps
3.0:1US$396US$1180256 Kbps
2.8:1US$230US$639128 Kbps
3.0:1US$128US$39364 Kbps
RatioIndiaIndonesiaBandwidth
Data from PT Telkom, Indonesia & BSNL, India
Comparison of ADSL Retail Prices (monthly) in Indonesia & India
2.3 : 1USD$41USD$93512 KbpsUsage limit: 2 GB* 5GB**
3.2 : 1USD$23US$74384 KbpsUsage limit: 1 GB* 2GB**
RatioIndia**Indonesia*Bandwidth
Lessons from the Indonesian Hostile environment (regulatory, market & infrastructural)
spawned WiFi and related innovations in Indonesia.
n Until, leased line prices are regulated in Indonesia or effective competition is introduced in this sector, Internet diffusion will remain sluggish.
n This will be true of other countries who want to adopt WiFi without a competitive or regulated leased line market.
n Number of studies have shown the correlation between lower leased line prices and rapid diffusion of the Internet (Petrazzini & Guerrero 2000; Fan 2005;)
ISP in Jakarta Using WiFi as Access
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