01 - Telecommunications An Overview

Introduction
Telco Management Session I
Telecommunications Management, - Copyright Harry Chrismanaria
Lecturer
Harry Chrismanaria, ST, MM

Contact : Email : harry.chrismanaria@gmail.com Phone : 021-70706075, 08111-982200
Telecommunications Management - Harry Chrismanaria
Contents
q q q q q Introductions History of Telcos Global Telcos Industry Indonesia Telcos Industry Telco s Future Trends
Literatures
q q q q q q q Karen G. Strouse, Marketing Telecommunication Services, Artech House, Boston, 1999. Ellen P Ward, World-class telecommunications service development, Artech House, Boston, 1998. Harald Gruber, The Economics of Mobile Telecommunications, Cambridge University Press, 2005 Stephen P. Robins, Management, 7th edition, Prentice Hall, 2002 Philip Kotler, Marketing Management, 12th Edition, Prentice Hall, 2006 Christopher Lovelock, Services Marketing in Asia, 2nd Edition, Prentice Hall, 2005 Stephen P. Robins, Organizational Behavior, Prentice Hall, 2003
Penilaian
q q q q UTS : 30% UAS : 30% Tugas/Presentasi : 30% (15% + 15%) Absensi : 10% (minimal ssi standar minimal UMB)
q Additional : Partisipasi
History of Telcos
Global History of Telcos
q q q q q q
The 1st 1790 1837 1876 1945/7 1972/3
: : : : : :
smoke signals, drums, arrows, etc semaphore systems in europe Telegraph (Samuel Morse) Telephone (Alexander Graham Bell) Mobile Phone (military) Personal Mobile phone (Motorola)
7
Evolution of Mobile Phone Devices

1. NEC Cellstar 500 (1990s) 2. Nokia 2110 series (1994) 3. Nokia 5120 (1998)
1st US Mobile Phone Motorola (1973)
4. Kyocera 2135 (2002) 5. Audiovox CDM8300 (2002) 6. Samsung SCH-A650 (2004)
Now
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Future
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What is Telecommunication
q Telecommunication is defined as any transmission, emission or reception of signs, signals, text, images, sounds, videos, or intelligence of any nature by wire, radio, optical, or other electromagnetic system
Telecommunication Services
Data
(DSL, Cable broadband)
Video
(Cable TV, Satellite TV, IP TV, Mobile TV)
Voice
(Wireline voice, cell phone, VOIP, PBX)
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Telecommunication Service Providers

Telecommunication Service Providers
Wireline (Voice, DSL, IPTV, PBX)
Wireless (Cellphone, Wireless Broadband, Mobile TV)
Cable (VOIP, Cable TV, Broadband)
Satellite (Voice, TV, Broadband)
To consider the building block of this industries, we should consider many more supporting industries , such as q Authorized Reseller q Network operator q Outlets q Infrastructure q BPO (Business Process Outsourcing) q CPE (Customer Premises Equipment) q q Content & Applications Value Added Services q q
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A Unique Service Industry

q Most service industries offer services on a discrete / episodic basis. q In telecommunications, Service delivery is not episodic, it is continual.
(World Class Telcos Service Development)
Is it true ? Let s see

Prepaid card ? Wartel / warnet / Payphone ? Credit card ? Workshop / Bengkel ? (Voucher langganan)
All Industries are trying to lock relationship with its customer, Making continual delivery, Creating repeat buying & loyalty
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4 Tahapan Strategi Operator

1. Operator fokus pada pembangunan jaringan untuk perluasan jangkauan layanan 2. Operator fokus pada harga (pricing), asumsinya, jika coverage sama, namun harga lebih murah dari pesaing, maka pengguna telepon akan memilih yang lebih murah 3. Fokus pada Quality of Service (QoS) 4. Fokus pada menyediakan layanan nilai tambah atau Value Added Services (VAS).
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Global Telecommunication Industry
Conditions & Key Indicators Review
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Global ICT Development
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Fixed Telephone
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Internet Users
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Internet users in 2010 as a percentage of a country's population
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# Internet hosts
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Telecommunications Management - Harry Chrismanaria Internet Bandwidth between G8 Countries
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Mobile Telephony
Mobile-cellular subscriptions, by level of development
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Fixed Broadband
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Mobile Broadband
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Industry Market Share
Source : http://marketshare.hitslink.com/
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Strategic alliances of device-OS producer now emerge : Samsung/ZTE Android, Nokia/HTC Windows Phone, ZTE Firefox OS
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Indonesia Telecommunications Industry
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Significant Wireless Growth
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Lowest ARPU in APAC
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Broadband Penetration Rate

Fixed Broadband
Wireless Broadband
Source : Frost & Sullivan

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Broadband Market
Source: Yahoo! and TNS Net Index of Indonesia in 2010 - Indonesia Internet Place of Access
Retrieved from https://wiki.smu.edu.sg/ digitalmediaasia/Digital_Media_in_Indonesia
Internet penetration in Indonesian homes is relatively low, and mobile is increasingly the medium that marketers should move towards in reaching consumers. In terms of place of access, mobile phones are the second most popular mode used to access the Internet, having increased 26% from 2009 to 2010. It is understandable that its share of Internet hours is lower than the amount of time Indonesians spend online at home, in the office and at Internet cafes, since online material is consumed on-the-go, rather than for long periods when one is static and immobile. Unlike the West, where there are many channels for distribution of content, such as the TV, laptop, desktop, smartphones, and iPad, Indonesians have two main channels they turn to for information and entertainment, namely TV and mobile. As mobile penetration continues to increase, marketers can capitalize on mobile usage by creating targeted, interactive content that can be consumed quickly on-the-go, and develop compatible social media tools and applications specifically for the mobile platform. A study done by Boston Consulting Group in September 2010 showed that Indonesian digital consumers use their mobile-handset connections to meet a variety of needs that are typically met in other countries through PC-based Internet. The Indonesian telecommunications market is unique in the sense 36 Telecommunications Management Harry instead Chrismanaria that users adopt mobile devices from the-start of migrating from landlines to mobile services.
Indonesia Digital Divide (2006)
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Initiative for KTI Backbone
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Telecommunications Management - Harry Chrismanaria Source: Menkominfo Presentation, Oct 2009
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Wireless Market Revenue Outlook

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Broadband Subscriber Outlook

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Single digit growth in a saturating market
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Software Market
87%
Pembajakan software
Sumber : Asosiasi Peranti Lunak Indonesia (Aspiluki)
Sumber : International Data Corporation (IDC)

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44

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Mature industry Lower rev growth

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Mobile data opportunity is big

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Some keypoints

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Some keypoints

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Future Trends
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Industry Analysis
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Porters 5 Forces
Threat of New Entrants
Bargaining Power of Suppliers
POTENTIAL ENTRANTS
Bargaining Power of Buyers
SUPPLIERS
INDUSTRY COMPETITORS
Intensity of Rivalry
BUYERS
SUBSTITUTES
Threat of Substitutes
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Threat of Substitute
Substitute products threat HIGH if : q Offer a similar level of benefits at proximate prices q Customer switching cost is low q Customer is price sensitive
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Threat of New Entrant

Entry barriers of new entrant : q Capital cost of entry q Economies of scale q Access to secret technology (patent) q Brand recognition q Access to distribution channel q Lack of experience cost disadvantage q High customer switching cost q Access to low cost input (e.g. labor) q Legislative barrier
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Acquisition of existing company ?? q Share same demand q Not producing new product q Not new entrant (e.g. Indosat - Satelindo)
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Threat of new entrant HIGH if : q LOW Capital cost of entry q EASY Access to secret technology (patent) q Brand recognition of existing player is LOW q Access to distribution channel q LOW customer switching cost q NO Legislative barrier
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Power of Buyer
Power of buyer HIGH if : q There few buyer who purchase in large quantities q Buyers have LOW switching cost q Buyers have choices for many sellers q Product/service is not important to customer q Buyers have information about seller s cost and other buyer s prices
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Power of Suppliers
Power of Suppliers HIGH if : q Few alternatives of supplies, many players q Player is not an important customer to suppliers q Supplies are important for players q NO substitutes for the supplied products q Supplied product has a good reputation/brand, especially to final products/customer
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Rivalry Amongst Industry Member

q Demand is growing slowly or declining q Customer can switch products easily (low product differentiation) q Price cutting strategy of new entrant q Players are similar in size and market power q There are excess capacity, moreover if it follows with high fixed cost q Dominant market sahre will lead to long-term profits (economies of scale & experience)
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Thank You
End of Slides
63

01 - Telecommunications An Overview

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Introduction

Telco Management Session I

Telecommunications Management, - Copyright Harry Chrismanaria

Harry Chrismanaria, ST, MM

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management, - Copyright Harry Chrismanaria

Global History of Telcos

The 1st 1790 1837 1876 1945/7 1972/3

Evolution of Mobile Phone Devices

1st US Mobile Phone Motorola (1973)

4. Kyocera 2135 (2002) 5. Audiovox CDM8300 (2002) 6. Samsung SCH-A650 (2004)

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunication Service Providers

Wireline (Voice, DSL, IPTV, PBX)

Wireless (Cellphone, Wireless Broadband, Mobile TV)

Cable (VOIP, Cable TV, Broadband)

Satellite (Voice, TV, Broadband)

Telecommunications Management - Harry Chrismanaria

A Unique Service Industry

Is it true ? Let s see

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

4 Tahapan Strategi Operator

Telecommunications Management - Harry Chrismanaria

Global Telecommunication Industry

Conditions & Key Indicators Review

Telecommunications Management, - Copyright Harry Chrismanaria

Global ICT Development

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Internet users in 2010 as a percentage of a country's population

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria Internet Bandwidth between G8 Countries

Mobile-cellular subscriptions, by level of development

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Telecommunications Management - Harry Chrismanaria

Industry Market Share

Telecommunications Management - Harry Chrismanaria

Indonesia Telecommunications Industry

Telecommunications Management, - Copyright Harry Chrismanaria

Significant Wireless Growth

Telecommunications Management - Harry Chrismanaria

Lowest ARPU in APAC

Telecommunications Management - Harry Chrismanaria

Broadband Penetration Rate

Source : Frost & Sullivan

Retrieved from https://wiki.smu.edu.sg/ digitalmediaasia/Digital_Media_in_Indonesia

Indonesia Digital Divide (2006)

Telecommunications Management - Harry Chrismanaria

Initiative for KTI Backbone

Telecommunications Management - Harry Chrismanaria Source: Menkominfo Presentation, Oct 2009

Wireless Market Revenue Outlook