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How to Monetize Data Services:
Opportunity
i and
d Challenge
h ll
Insider Seminar Series 2014
Alexander Rusli, ATSI Chairman
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Agenda
1
What Industry Facing Today
2
Opportunity in Mobile Data
3
How We Monetize It
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Trends of shifting usage from voice into data
Asia Pasific voice ARPU exhibits a significant
declining trend
Global mobile revenues, voice vs. data, 2009-2016.
Data revenue rapidly growth
25000
Revenue
e (US$ Billion)
Average Vo
oice ARPU (IDR)
30000
20000
15000
10000
5000
0
2008 2009 2010 2011 2012 2013 2014 2015
Source: IDC
Source: Informa
Voice revenue is decreasing, while mobile data revenue is increasing rapidly
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High growth of mobile data traffic
Mobile data usage is expected to grow globally
(almost 75% increase by the end of 2012)
Incremental usage of video traffic is expected
to reach 66% of total mobile data traffic by 2015
Annual smart phone data usage projection 2011-2015
(Peta byte/month)
Cisco Forecasts of Global Mobile Data Traffic
Peta bytes per Month
12.7%
20 9%
20.9%
66.4%
Source: Informa
Source: Cisco VNI Mobile
Mobile data traffic is forecasted to grow significantly over the next 3
years, especially due to mobile video applications
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Increasing smart device penetration
CAGR 2010-15
Global mobile data traffic in ‘000 PB per month
116%
85%
190%
85%
* Other devices include non-smartphones, home gateways, M2M and other portable devices
Source: Cisco VNI
With unit prices falling rapidly, the adoption of “smart” devices will increase
significantly
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The case of Indonesia is no different:
Smart device penetration is increasing rapidly
Smartphone subscribers (millions) and penetration in Indonesia
Source: Credit Suisse
Indonesia has also witnessed a rapid increase in sales of smartphones; the current
shipment share of 3G handset is estimated to be more than 30% (1)
(1) Huawei estimates above 40%
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… and contents, games, apps and digital services
become part of lifestyle
Indonesian spend an average of over 34% of their
overall entertainment spend on Digital Music
Usage of Social Network
reach 66% of total mobile data traffic
Indonesia Content Market
Worth Rp 14.3 Trillion in 2013
4,817 , 34%
3,780 , 26%
Social Content
Source: Informa
Gaming
3,349 , 23%
2,384 , 17%
Online Ads
Digital Music
Source: Cisco VNI Mobile
Increasing smartphone penetration will lead to higher usage of
contents, games, apps and shape the way the society use them
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But, it brings significant impact to Telco:
Scissor effect dilemma
Categories
Players
Traffic
Impact
Revenue
Impact
Entertainment
& Social Network
Commerce
Advertising
Operator Service
Substitute
= high impact
= low impact
OTT drive both data traffic and data revenue for Telco operator , however the traffic
(as cost to operator) grows much faster than the revenue…
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While it is continuing to make downward pressure on
ARPU levels
Source: BMI
Based on Indonesian operators' historical ARPU data, we do not expect ARPU rates
to defy the general downtrend that we are experiencing
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Agenda
1
What Industry Facing Today
2
Opportunity in Mobile Data
3
How We Monetize It
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Indonesia is a very attractive market:
key trends and stats
242.3 mio population
72.7 mio internet user,, 29% p
penetration
79 6 mio smartphone user
79.6
user, 33
33.7%
7% penetration *))
Devices
Main Uses
Increasing middle class wealth
stable economic growth of 6%
Mobile-first internet market
intense competition between mobile companies is pushing
prices down and raising consumer awareness
Sources: Credit Suisse, 2013
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Internet users is continuing to grow, as well as fixed
broadband subs
Source: BMI
Expected 99mn internet users in Indonesia by end-2017, up from 73mn in end-2013
and 4mn fixed broadband subscribers by end-2017
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Adjacent business: emerging services e.g. mCommerce, digital ads, cloud computing, and
communication
i ti
mCommerce
Digital Advertising
Content and Communication
ƒ Mobile banking
ƒ Mobile advertising
ƒ Online video, media, and IPTV
ƒ Digital wallets
ƒ Digital signage
ƒ Voice and video calling
ƒ Digital remittances
ƒ Online and mobile banner advertising
ƒ Online games
ƒ Micro credits
ƒ Opt-in push messaging
ƒ Micro insurance
ƒ Email marketing
ƒ Content delivery solutions such as
content acquisition,
q
, processing,
p
g, and
storage
Digital
Services
Cloud Services
M2M
ƒ Integrated communications for utilities
ƒ Virtual data centres
ƒ Connected vehicles
ƒ SaaS (Software as a Service)
ƒ Fleet and asset management
ƒ BPaaS (Business Process as a
Service)
ƒ Smart metering and telemetry
ƒ Securityy and surveillance apps
pp
ƒ PaaS (Platform as a Service)
Other Services
ƒ eHealth: Remote patient monitoring,
tele care tele
tele-care,
tele-consultation,
consultation etc.
etc
ƒ Security: Managed security services,
clean pipes, and mobile and PC
security
We can have a business beyond traditional Telco’ Biz ..!
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Growth Opportunity in adjacent business
Addressable
market
Telcos can
capture
Mobile
Finance
USD 0.2 B
to
USD 0.5 B
USD 0.1 B
to
USD 0.4 B
Mobile &
Digital
Advertising
USD 3 B
To
USD 4 B
USD 0.8 B
To
S 1B
USD
Online
Commerce
Up to
USD 12 B
Up to
USD 0.1 B
Drivers
•
•
•
•
50% unbanked population
Cash driven economy
Infrastructure constraints for banks
>50% churn reduction for MFS subs
•
•
•
Huge industry (total ads rev = US$12B)
Digital ads as % of total ads (@ 3%)
significantly
g
y behind g
global avg.
g (@ 25%))
Strong localization slowing foreign entrants
•
•
•
High consumption
Online commerce still behind regional avg
Direct revenue + data growth through bundles
Source: BCG, Greenwich, McKinsey
These Biz are huge! Opportunities for Telco’s, Finance, e-commerce to do Strategic
Partnerships….
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Agenda
1
What Industry Facing Today
2
Opportunity in Mobile Data
3
How We Monetize It
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We are on the transition phase …
Data and digital services will become growth driver. Data will be a major
business, while the Digital services will be a new revenue source
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Deploy multiple broadband technologies
and single view of user…
As enabler:
• Backhaul broadband
• Data offload (mobile data
experience, customer
retention)
Fixed
Broadband
Data offload &
backhaul
Cloud, C
ontent &
Apps
(OTT)
As enabler: data offload for
mobile
bil services
i
Services:
• Retail : hotspot client
• Wholesale : WiFi roaming
Technology:
gy multiple
p SSID
AP
Backhaul
WiFi
3G offload
Services:
• Retail : HS Internet,
streaming (IPTV, VoD),
video call, cloud
• Corporate: HS internet,
cloud, fixed connectivity
(TDM services)
Technology: FTTx/GPON
Mobile
Broadband
Services: Browsing, social
media chat
media,
chat, voice & video
call, streaming, cloud
Technology: U900, LTE1800
Device
Fixed broadband, mobile broadband and WiFi as dual function : (1) As pipeline for the next
revenue stream (cloud and content); and (2) As revenue stream from each services
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… and also fill the void on broadband:
affordable & high quality
Telco / Operators
Broadcast/TV
Internet / IT
Finance/Commerce
“Digital Lifestyle”
Market
IDR 10 Tn (2015)
Theme
“Own the Living
R
Room”
”
Segments
Services
“Always
Connected”
Home
•
•
Quadruple play
Multi screen
IDR 44 Tn (2015)
IDR 103 Tn (2015)
“Digital
Digital Business”
Business
Corporate
Personal
•
•
•
Cellular services
Content
Commerce
•
•
Connectivity
IT services
Infrastructure (Fiber, Cellular, WiFi)
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Develop new multi-platform digital
services with three main pillars
Driver
Pillar
Incubation
and
Investments
Dedicated
Digital Services
Business
Unit
Commercial
Partnership
•
Invest in innovative
apps and
d startups
t t
to
t
capture value beyond
arpu
•
Secure growth from
adjacent business
•
Stimulate data
ecosystem through
enabling platforms
•
Grow data revenue
through commercial
partnerships
Execution
Strategic Partner
Strategic Partner
Incubator
Venture Fund
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Initiate idea competition, business
incubation and venture fund program
IWIC Competition
9 Indosat Wireless Innovation
Contest (IWIC)
Incubator for Startup
Venture Fund
Batch # 1
9 Funding for startups
9 Funding for Indosat JVs
9 Encourage new idea /
innovation with competition
of potential startup
9 Early digital ecosystem
participation in Indonesia
9 Strategic Partner
•
5 months program,
one batch each year
• Initial step in search of potential
idea / innovation
• 3 year program, two batches per year
• 4 startups
p already
y in
• Partners also coaching the teams
•
4 year investment horizon
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Thank You
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