“I came more to learn from you; than to teach” was the message I passed before my two presentations with Sujata. Thanks Fusion/Telecentre.org for the opportunity. The three days spent with 200+ telecenter operators from eight provinces in Sri Lanka was a worthy investment. One does not interact with so many ground level ICT4D practitioners every day. It was a learning experience, for them; and for us.

From what I saw (and heard from others) the workshop, ‘weCAN: Social Enterprise with a Triple Bottom Line’ the second in the series of capacity building workshops of the Telecenter family of Sri Lanka was a grand success. Organized by Fusion/Telecentre.org (and funded by IDRC), we met at MIMT (MAS Institute of Management and Technology), Thulhiriya for four days (two batches). Plan was to amass 400 of telecenter operators from eight out of nine provinces of Sri Lanka but the recent floods in many parts of the island have stood in their way.

200+ participants was not bad. It was a mixed group gender and ethnically balanced. We had mainly ‘Nenasala’ and Sarvodaya multipurpose telecenter operators, but there were few odds too- like those who represented the telecenters at public libraries.

So what did I learn?

More will surely come when LIRNEasia survey results are analysed, but just Four Lessons, for the moment.

Lesson No. 1 (Good News!): GREAT THINGS HAPPEN AT GROUND LEVEL.

More than 50% of the crowd were newbies – either those who have started recently or who run more a ‘hand to mouth’ existence – but on the other hand, successful telecenter operators were not that rare a commodity, as many would think. I picked eight guys who are doing excellent. (Sadly no gender balance here, but things will surely change with many innovative ladies entering to telecenter space.)

Inter alia, we have heard the stories of Kathivan from Badulla whose telecenter earned LKR 300,000 (> USD 3,000) in one month; of U.M.G.Prasad from Sevanagala who uses Internet to link job seekers in his community with prospective employers (This clips tells more: http://www.youtube.com/watch?v=XqwU6k8Y35E); of Noel Tharmarathnam from Trocomalee who opens the doors of online IT exams to a post-conflict society (“I have to keep a low profile” he tells me over lunch, “…if I try to do too many things; I might not see tomorrow”); of Sanjeewa Kumarathunga from Nivithigala who told us about his efforts to help agriculture activities of the community and of Jayantha Wickramaratne from Panamura who runs a BPO operation. Congrats guys, and I hope the others have learnt from your experience.

Lesson No. 2 (Good News!): TELECENTER FAMILY OF SRI LANKA IS WELL CONNECTED THROUGH SOCIAL NETWORKING.

Try www.tcf.lk. Not everybody is there yet. Neither every member is a telecenter operator per se. (There are people like myself – who spend more time at our desks than at telecenters) Still, a good start. With this, Telecenter family becomes perhaps the first group in Sri Lanka to *officially* exploit the full features of Social Networking. Glad to see it happening in a place where many consider Social Networking is just for fun. I guess the credits go to Isura for creating this great platform.

Lesson No. 3 (Bad News!): NOT EVERYBODY IS CONNECTED.

This was a real eye opener. I thought Internet connectivity is central to telecenter operation. Without connectivity, a place with few computers does not become a ‘tele-center’. I was wrong. Some ‘telecenters’ in Sri Lanka have neither Internet nor e-mail. There are two groups – the recent additions who eagerly wait till ICTA responds to their numerous requests, and those who once had Internet facilities but now isolated because of an operator/technology transition. One can just forget it attributing to bureaucracy, poor planning and attitude problems. Can they too, who interact with communities on daily basis? What can a telecenter offer with no Internet? Are PCs only to learn inserting clipart on PowerPoint slides? I am not sure whether ICTA is aware that Internet is cut off from some telecenters for months. (Classic case was NINE months). Please do something, fast! Bits and Bytes are the food of net life and if deprived one can starve faster than we think.

Lesson No. 4 (Bad News): MOST TELECENTERS IN SRI LANKA RUN PIRATED PROPRIETARY SOFTWARE.

This is sad, but true. Out of 200+ operators none claimed using original versions or FOSS. With pirated versions no longer publicly sold on CDs (as a result of recent raids) a telecenter operator has to be innovative in finding solutions. I met few ‘gurus of pirated software’ who know A-Z from best download sites to cracking codes. Many think these as ‘originals’.

When asked when or whether ICTA intends to provide licensed versions of these to them, all what its representative has to say was (a) this was an issue from the beginning; (b) ICTA has no solution yet and (c) he needs to talks to his boss, who he thinks may have an answer. (I doubt!)

My question is why donors spend millions of Dollars on Free and Open Source Software if they are not used at ground level. As we say in Sinhala, use a sword has if not for war?

Enough for now. More later, with figures. Please watch his space.

India has, in fact, one of the lowest broadband subscriber penetration rates in Asia. So what accounts for the slow growth? One reason could be the price of a broadband connection. Broadband is defined by TRAI as an always-on data connection that can support internet access and a minimum download speed of 256 kbps. Prices for such connections have remained static the past few years. A simple comparison between the cost of broadband in India and, say, the United States, reveals that on a one-year contract, while the cost per month of a connection in both countries is roughly the same, the data transfer speed in the US is at least double than that in India.

Read the full article here.

F.C.C. Weighing Limits on Slowing Web Traffic – New York Times

Consumer groups have said that such discrimination against some content providers has been aimed at Comcast’s rivals and is both unnecessary and threatens to undermine the freewheeling nature of the Internet. In his comments, Kevin J. Martin, the agency’s chairman, tended to agree.

“They must be conducted in an open and transparent way,” Mr. Martin said at a hearing Monday on network neutrality and network management. “While networks may have reasonable practices, they obviously cannot operate without taking some reasonable steps, but that does not mean they can arbitrarily block access to certain services.”

In sharp questioning to a senior executive from Comcast, Mr. Martin indicated that the commission was considering whether to levy a fine or issue an order that would limit the company’s ability to slow down broadband traffic to consumers using file-sharing programs.

Michael J. Copps, a Democratic commissioner, said that until recently, the cable company’s policies had been decided “in a black box that the American public could not peek into.” He expressed alarm that any cable companies might be degrading or slowing network traffic.

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In his presentation titled Backbone of convergence: Getting the foundation right, Divakar argued that without sufficient “big pipes” (domestic and international backbone) the potential of convergence and NGN services will not be realized. Indonesia’s inadequate international backbone infrastructure and high prices have acted as a bottleneck to the development of the Internet in the country. For example, Indonesia’s international private leased line circuit (IPLC) to Singapore costs 21 times the price of equivalent service from India based on route kilometers. Divakar contented that the Government’s plan of licensing one additional international operator will neither stimulate international gateway infrastructure nor bring down international bandwidth prices sufficiently.

His policy recommendation was that Indonesia’s international gateway needed to be fully liberalized. It is a win-win for the Government that gains increased revenue from grey market traffic that comes into the legal channel, more international infrastructure gets built and more cables land into the country improving redundancy and resiliency of the network to outages (a la Taiwan earthquake of Dec 26, 2006), it lowers Internet connectivity and IDD prices for consumers and most operators gain from improved international access and lower wholesale prices.
About a week after the Summit, DGPOSTEL, one of two ICT regulatory bodies in Indonesia, proposed an amendment to Article 35 of Regulation 20 that would allow domestic leased line providers to connect directly to an international cable or set-up its own landing stations to land cables to provide international private leased circuits. Voice is excluded from this service for which one needs to have an IDD license. This amendment is targeted for international data connectivity to bring down international bandwidth charges. There are about four to five domestic leased line providers who can take advantage of this amendment.

Currently there is a duopoly (PT Telkom and PT Indosat) in the IPLC market. This amendment falls short of full liberalization of Indonesia’s IGW but may be a baby step towards reducing the outrageously high bandwidth prices in Indonesia.

LIRNEasia researcher, Divakar Goswami, was also interviewed. The interview is featured in the online edition here. The interview is in bahasa. The English text of the interview is below:
1. How’s the growth of ICT in Indonesia for along 2006 (as we see from regulations, infrastructure development (hardware and software), human being, ICT industry etc)?

Information and Communication Technology sector (ICT) in Indonesia is one of the most dynamic sectors of the economy contributing most to GDP growth rate (around 16%) than any other sector. The ICT sector in Indonesia is dynamic, growing and profitable. Compared to the past, the regulatory environment is more transparent, pro-market, pro-growth and therefore pro-poor.

ICT Sector

Wherever competition has been introduced, growth has been spectacular; those sectors lacking competition have grown more slowly. Take the example of the mobile sector that has added 6.6 million subscribers during the first half of the year and where operators have aggressively invested in infrastructure. For the year 2006, we may see an investment of more than $2.5 billion dollars made in the mobile infrastructure as the existing operators gear up to face the challenge from Hutch and Maxis who are rapidly rolling out their infrastructure. The mobile operators have been expanding their network at a frenetic pace: Since the end of 2005, Telkomsel has increased its number of base stations from 7,741 to 12,156 a growth of 57 percent; Excelcomindo’s base stations during that same period have grown from 3,620 to 6,052, a growth of 67 percent. Despite making substantial investments, mobile companies continue to be profitable. Excelcom and Bakrie Telecom that had losses in 2005 have made profits this year.

The fixed sector’s performance on the other hand is poor. The growth of fixed line phones per 100 inhabitants will probably be negative this year as the number of fixed phones remain stagnant and the population increases. Because of Telkom’s de facto monopoly in the fixed line market it is unlikely that the company has any incentives to invest in this sector and nor can investment come in from other operators if the sector is not fully opened up to competition.

Many have argued that why bother with fixed if mobile is doing so well. Since most of Internet service provision is currently relying on fixed infrastructure, the lack of fixed line growth means that there is also no growth in Internet subscribers. According to BPS’ survey from 2005, there are an estimated 10.3 million Internet users who access the Internet from home, office, warnets etc. For a country of 222 million that is less than 0.05 percent of the total population that use the Internet. If one looks at Telkom’s broadband subscribers, it stands at a pathetic 35,000. What are the reasons for this and how can we bridge this digital divide?

The significant cost components of an Internet Service Provider (ISP) in Indonesia are its leased line and international bandwidth costs. As my WiFi study on Indonesia (available on www.lirneasia.net/projects) has shown, leased line prices in Indonesia are around 48 time the price in India for a comparable link. International bandwidth costs are also a couple of times higher compared to countries in the region. Both the domestic and international leased lines have limited competition and hence the prices tend to be high. This translates to nearly $4000 in monthly leased line and internet connectivity costs (512 Kbps) for an ISP. Taking into consideration the average income of an Indonesian, it is astronomical sum! No wonder Internet access in Indonesia is unaffordable to the vast majority and will continue to be so unless competition is introduced in the “big pipes”—in the domestic and international backbone infrastructure markets.

Broadband penetration will continue to be low as long as there is only one provider of ADSL. Hopefully, in the future, competition from wireless broadband providers will lower the prices and make it more affordable for Indonesian people.

ICT Regulation

The Ministry and BRTI have undertaken a number of pro-growth initiatives in the last year or two. It has successfully conducted 3G auction that has been widely perceived as the most transparent licensing in Indonesia’s history. Two new mobile operators have been introduced and the increased competition will hopefully drive down mobile retail prices and make them more affordable for those in the “bottom of the pyramid.” A new cost-based interconnection regime has been introduced, which mandates cost-oriented interconnection and provides enforcement “teeth” to the regulators. When implemented from 2007, it will hopefully promote fixed-line competition and ensure greater transparency in this contentious area.

BRTI’s regulation to implement a phased reduction of leased line prices based on cost calculations may help lower Internet retail prices and help diffusion of Internet connectivity.

However, there are a number of regulatory barriers that are preventing faster growth of the sector. Indonesia has an archaic licensing framework that may have been relevant 10 years ago, but not anymore. Converged services where voice, data, video may be combined blurs the boundary between traditional fixed and mobile services. Indonesia’s regulatory environment is simply not relevant to converged IP-based networks like the New Generation Network (NGN) that are being ushered in all across the globe. The current licensing framework is not technology neutral and has different rules and licensing requirements based on a particular technology. This has resulted, for example, in a situation where the regulator is trying to prevent Bakrie Telecom and Telkom Flexi from providing full mobility services because their license treats them as fixed operators although the CDMA technology can be used to provide full mobile services that will significantly enhance the utility of the service to customers.

Why Bakrie Telecom is licensed to provide service in only two regions is beyond my understanding. When a country does not have enough telecom infrastructure I would think it is in the interest of the Government and the public if an operator is allowed to build a network throughout the country. There are many other serious problems with the licensing framework which I will not get into, but this by far remains an area where more of the Government’s energies should be focussed.

Most of the operators I have spoken to, with the exception of Telkom, feel that although the current regulatory structure is better than what existed previously, it is still not independent in its decision-making. If you look at the structure of the organization it is apparent that BRTI is embedded within the Government that also controls two of the largest telecom operators in the country, Telkom and Indosat. The credibility of BRTI’s decisions will be considerably enhanced among the operators and other stakeholders if it were reformed and given more independent powers and separated from DGPT. The small degree of independence for BRTI has shown impressive results in terms of investment that has come into the sector. Imagine the investor confidence if a fully independent regulator can be put in place?

2. Is there any progress in 2006 than 2005? If yes, what is the indicator?

The following graph indicates quite clearly the progress of the ICT sector from 2005 till half of 2006:
The number of mobile phones in Indonesia per 100 inhabitants has increased quite significantly from 21.6 in the end of 2005 to 24.32 in the middle of this year. The number will probably go up by the end of the year, although growth from 2005 to 2006 may not be as rapid as from 2004 to 2005. However, with the introduction of Hutch and Maxis in the mobile sector, we should see more rapid growth in the number of mobile subscribers who are added to the network at the end of 2007. More competition in the mobile sector will lower mobile retail prices that are quite high compared to the region and make it more affordable to those on the “bottom of the pyramid.”

Although the penetration of fixed wireless access (FWA: CDMA) seems to grow slowly from 2005 to 2006, it does not reflect the impressive performance of Bakrie Telecom that has grown its network from 0.3 million to 1.3 million in less than a year. The slowing growth of FWA is primarily because Telkom Flexi shed a significant number of non-revenue generating subscribers from its network.

3. If no progress or stagnant, would you please to explain it?

Fixed wireline penetration has been negative because of a lack of competition in that sector. In a country with such low penetration one does not expect to see negative growth rates. Telkom, the monopoly provider, has no incentive to invest in fixed line infrastructure in the absence of competition.

Internet penetration numbers from 2006 are not available although growth in the number of Internet subscribers will continue to remain low because Internet prices remain unaffordable to a vast majority of Indonesian. Furthermore, only 3.74 people out of 100 own a PC in Indonesia. Of those PC owners only 27 percent use their PCs to access the Internet. Low PC ownership and low Internet use even among those who own PCs are also other factors that are contributing to stagnant Internet growth.

4. What do you think about the commitment of Indonesia’s government or Information Communication Department (Depkominfo)?

In view of the past year’s performance, I believe that the Minister Sofyan Djalil is someone who would like to reform the ICT sector and bring more competition to develop ICT infrastructure and lower prices. However, as an outsider, one gets the impression that not everyone in the Depkominfo is on the same page as the Minister. Furthermore, since the Indonesian government is dependent on dividends it receives from Telkom, it is probably hard to take decisions that may affect the profitability of the company. It is therefore crucial to separate the policy and regulatory functions. Let the Depkominfo develop policy and leave the day to day business of regulating the ICT sector to the BRTI.

5. What is the important think in this year that must be done by the government but not yet finished?

The Government has been collecting Universal Service Obligation (USO) funds from operators to roll out basic telephone service to 40,000 villages in Indonesia that do not have any connectivity. A least-cost subsidy auction was supposed to be held this year to disburse the USO funds in a transparent manner. However, a Ministerial decree is awaited to launch this very critical program to extend access to the digital “have-nots.” It is hoped that the auction will be held soon and will be open to all network operators (fixed and mobile).

6. What do you think about Dewan Teknologi Informasi (Information and Technology Council) formed by The President SBY? Are you optimist or pessimist with this council?

The formation of the National Information and Communication Technology Council (NICTC) by the President Susilo Bambang Yudhoyono, is a very important development for Indonesia’s ICT sector. It signals the recognition at the highest level of government that the ICT sector is important for Indonesia’s development and growth. Since the lapse of the 1999 Blueprint, the ICT sector in Indonesia is rudderless. Although the Government has good intentions, many of the policy/regulatory actions have been taken on an ad hoc basis without the guidance of a coherent vision. So a number of decrees have been issued that are overlapping and licensing is being done on an ad hoc basis. For infrastructure sectors with high sunk costs and long gestation periods, like for telecoms, there must be continuity and coherence in the Government’s policies.

Clear vision informed by the views of the various stakeholders can make the Council a guiding hand that can lead the sector to a higher trajectory of growth. The leadership can remove many hurdles imposed by bureaucracy and narrow vested interests.

The first meeting of the Council will be key in defining the objectives that the Government and other stakeholders aim to achieve for the ICT sector. The success of the Council will depend on it developing a time-bound road map or action plan that lays out what the Government would like to see achieved and in what time frame. When the Technical Coordination meeting is held every three months, they would be in a position to evaluate the implementation of the action plans. The biannual Council meeting led by the President would ideally evaluate progress of the action plans, make changes when required and bring to task parties that are responsible for delays in implementation. If that happens, watch the Indonesian ICT sector take-off like a rocket!

8. According to you, what must they do to make a good ICT implementation? And what improvement we can do next?

Good implementation of ICT projects must take into consideration sustainability of the projects when funding stops. For example, it is laudable that Qualcomm has provided wireless access to high schools in Way Kanan in Lampung and plans to connect 59 villages with “warcells,” cellular kiosks. However, the key to success to these projects is to develop a financially viable model to sustain this initiative when Qualcomm stops funding this program. As Grameen in Bangladesh has shown with the Village Phone Program, it is possible for a company to provide connectivity to rural villages in a profitable manner. Because Grameen is making profits from providing telephone connectivity to villages it is in its own interest to expand the service to more villages and in turn help bridge the digital divide.

These disruptions have major consequences for any business that relies on telecom for delivering their services, including, banking, trading, call centers, remotely managed services etc. This event also underlines the necessity for redundancy and why policymakers and regulators must liberalize international gateways to allow a number of different submarine cables connecting different destinations to land in a country.
From Bloomberg:

Damaged cables include the APCN2 cable and Sea-Me-We3 cables, Chunghwa’s Leng said. Eight STM-1 cables from Okinawa off Japan and 4 STM-1 cables to Shanghai are acting as backup, Chunghwa said in a statement. The company may also use the ST-1 satellite.
Singapore Telecom, France Telecom SA and Pakistan Telecommunication Co. are among companies that own the Sea-Me-We3 cables linking Europe to Asia. Operators in the APCN2 cable network that connects Japan, Korea, China, Taiwan, Hong Kong, Philippines, Malaysia and Singapore include China Unicom Ltd., StarHub Ltd., Telekom Malaysia Bhd. and Telstra Corp.
[..]“The repairs could take two to three weeks,” said Leng Tai-feng, president of Chunghwa Telecom Co.’s international business. The Taipei-based company, Taiwan’s largest phone operator, said two of its undersea cables were cut.
HSBC Holdings Plc said its online banking services were down, while Chunghwa said almost no calls could be made to Southeast Asia, causing disruption to companies including First State Investments in Singapore.
“I can’t trade if I don’t know the prices,” said David Leong, who heads the Singapore trading desk at First State, which manages $15 billion in equities in Asia and emerging markets. “I’ve put in limit orders to try to minimize the damage, but even then you need to have the basic information.”