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
Mobile banking
Mobile advertising
Online video, media, and IPTV
Digital wallets
Digital signage
Voice and video calling
Digital remittances
Online and mobile banner advertising
Online games
Micro credits
Opt-in push messaging
Micro insurance
Email marketing
Content delivery solutions such as
content acquisition,
q
, processing,
p
g, and
storage
Digital
Services
Cloud Services
M2M
Integrated communications for utilities
Virtual data centres
Connected vehicles
SaaS (Software as a Service)
Fleet and asset management
BPaaS (Business Process as a
Service)
Smart metering and telemetry
Securityy and surveillance apps
pp
PaaS (Platform as a Service)
Other Services
eHealth: Remote patient monitoring,
tele care tele
tele-care,
tele-consultation,
consultation etc.
etc
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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