MIC-1

The MIC-1 (Moratelindo International Cable - One) is a new undersea optical cable owned by the youngest national backbone operator Moratelindo (Moratel). It links Batam to Changi (Singapore) and was scheduled to start the service by Q1/2008. Moratel's partner at SG side is ViewQuest (does anybody know about this company?). An SG-partner other than SingTel is rare :-) ! Moratel is a quite progressive backbone operator. Its market share of revenue would possibly be larger than ICON+ for this year.

Some facts and details about MIC-1:

• Length : 70 km (wet segment should be less than 50 km ?!)
• CAPEX : USD 12 mn
• Capacity : initially 10 Gbps (STM-64), DWDM ugradeable
• Contractor / Supplier : GMSL, Nexan
• Date of Service : Q1/2008

SMS : A 23 Years Old Cash Cow

Want to know how rich are the cellular operators todays ? Let us make some calculations! For simplicity, we only consider Short Messaging Service (SMS) offered by the largest domestic operators: Telkomsel (TSEL), Indosat (ISAT) and Excelcom (XL).

The SMS production rate of these operators is quite fantastic. As of 2007, together they produced more than 400 mn SMS each day on average. Peak SMS production rates, which may happen in some special occasions, could be in the range of 1.5 to 2.0+ of the average rate. Detail average production rate for each operator can be seen in the picture.

Based on the current pricing and promotional schemes, the revenue obtained by each operator from Short Messaging Services is as follows. Note that this is the revenue for a single day!

The revenue given above contributes to around 20% - 30+% of the operators' total revenue.

Broadband : Penetration & Pricing

There might be several definitions for the term "broadband". Here I use this term to refer to services which run on channels / infrastructures other than those utilized by traditional voice services. Usually it should be faster than 64 kbps. Practically it denotes services using xDSL, FTTx, Cable/HFC or novel state-of-the-art wireless technologies. Some numerical data presented in this post are taken from Point Topic and REACH. Those are actually rather outdated (2004). But some characteristics concluded from those might remain similar and could be used as an approximation for our current situation.

As of 2004, the market share of installed broadband lines in APAC region is larger compared to that of the EMEA region or the American continent (see the picture). At that time, there are around 45 mn broadband lines / subscribers in the whole APAC region. This is about twice of the number of broadband lines in the whole America. This fact might have a direct or indirect impact on the pricing scheme. As you can see in the picture, bandwidth in countries like South Korea, Japan, China, Taiwan and Hong Kong is (much) cheaper than that in other countries. In Japan, the "champion" country in this case, one can have a 45 Mbps connection for USD 36 a month. Yes, okay, if we look at India, Malaysia, Singapore etc. the statement above is not (yet) applicable. But the global trend "faster but cheaper" has propagated and now reached those states. Hopefully soon, I could update this post with more actual data. Whether some of you have those already ?!

Intra-Asia IP Traffic

This post is closely related to the previous one, except that here we discuss about Internet traffic not about bandwidth capacity. I found an interesting statement given by a REACH official:

"In 1998, 100% of IP traffic between countries in the APAC was transmitted via the US. In 2004 it was around 30% (estimated)."

I do not know what criterion is used by REACH to come to those figures. But pesonally, I feel it is highly possible to be true. In around 1995, I remembered that when I called "traceroute" from my university to any local ISP, it gave me several US-hops! At that time I was dreaming a local version of NSFNET in this country (yes sure, later I knew that this is the timeframe where NSFNET was decommisioned!).

Many people at that time only concerned on establishing connections to the center of the Net i.e. the US and did not care about anything else. But slowly the "message" is spread and more and more people understood the idea behind this new thing. ISPs were making both bilateral and public peering(*). The govt has updated the regulation for encouraging local connections. Is it enough to suppress the inefficiency? Maybe! But I believe that right now intra-Asia IP traffic that travel first to the US is still in the figure of 10% or even more.


(*) for local readers, please note that peering != "piring" ! :-D

Intercontinental Internet Bandwidth

Recently, Telegeography has published some information and facts for the telecommunication's world in the last year. One of the facts is related to the international IP bandwidth as given in the picture (at the top).

Surely, except the numeric values, it might for many people not a surprise : North America is the center of todays' Internet. This actually has happened already for a long time, since the born of the Net :-D. As of 2007 the total aggregate bandwith capacity to/from North America is around 2.7 Tbps, a half of which is used to connect to Europe. Asian countries have an aggregate Internet bandwidth of around 0.9 Tbps, which is still below that owned by the european countries (1.7 Tbps). The capacity for Non-US/CA connections is only 0.2 Tbps. What does it mean ? The Internet would practically not work without US and Canada :-D ! This might also imply that US and Canada host the majority of the current Internet content!

But the figure might change in the next years. Though the increase of trans-atlantic IP bandwidth is still dominant compared to trans-pacific or other regions (see the picture at the bottom), the role of asian countries could in the future become more significant. The reason is simple: the asian countries are densely populated and have many potential Internet users/players!

BRCS : What's Wrong?

Update - the illustration at the right is possibly inaccurate! Some people said that BRCS is not through Melacca strait; it connects Batam and Rengit at the right-side of Johor. It is definitely not Rengit as you can see on the illustration. Sorry for this! :-)

BRCS stands for Batam Rengit Cable System. It is a submarine optical cable linking Batam (Kepri, ID) to Rengit (Johor, MY). The cable is owned by XL at ID side and TM at MY side. It is just commisioned on last december.

A friend of mine is doing NAP business which makes use of BRCS. Several time ago, he told me that his BRCS-connection was lost due to a possibly cable break near its landing point at Rengit. Is it true ? Well, unfortunately, Google didn't give suggestions which lead to any possibly official announcement, either from XL or TM. A useful hint from Google leads only to an inofficial message put as a short comment at a blog of Dr. BR (surely, he is not BRCS :-D - sori pak! guyon dikit). It is also not easy to find some more details about the system on the net. Below are some facts about BRCS.

• CAPEX : about USD 10 mn
• Distance : 63 km (it shall actually be longer. Tapped to the existing cable on the way ??)
  
• Construction : 04/2007 - 11/2007
• Supplier / Contractor : n/a (NSW Submarine ?)
• Capacity : one cable, 48 core (24 XL, 24 TM ?), initially 1/STM-64

A cable break within two months of operations is certainly not a good reputation. The marketing people might have to work harder to acquire bandwith-customers in the future.

Palapa Ring (1)

I remembered when I was a teenager, the government was proposing a national broadband network called Nusantara-21 (N21). In an official document of the goverment, this concept was issued in 1988 (Wow!), about three years after Singapore launched its national IT plan. But I didn't hear it before the time where Singapore began its initiative SingaporeONE and Malaysia initiated the MSC project (surely several time after the Al Gore's 'Information Superhighway' speech :-D )

According to KKPPI, the government re-explores the N21-initiative. It is now called Palapa Ring. The official statement : "The combination of a much higher demand for telecommunication services, ICT applications and reduced costs due to the further development of Of technology has improved the financial feasibility" (of the project).

Need another explanation ? The Jakarta Post (31/01/08) wrote "The Palapa Ring is an ambitious project which aims to link Sumatra, Java, Kalimantan, Nusa Tenggara, Sulawesi, Maluku and Papua and eight existing network connections or backhauls through an estimated total 35,280 kilometers of undersea and 21,870 kilometers of underground fiber-optic cable".

An initial study has been done (Sofrecom, TT-Tel, ITB ??) and gives the following information:

• CAPEX: around USD 1,500 mn
• Coverage: 33 provinces; 440 districts; 35,000+ km undersea (well, festoon systems); 20,000 km terrestrial
• Construction time : 3 - 5 years (starting from Q3/2008 ?)
• Topology: 7 islands' ring + 1 national ring
• Capacity: 320 Gbps (4/8/STM-64) - 200 Tbps (4/8/40/160 - this is for me somehow not realistic without significant cost for equipment upgrades!)
• Demand in 2010 (rough model): Sumatera --> 120 Gbps; Java --> 150 Gbps; Kalimantan, Sulawesi,Bali-Nusa Tenggara --> 15 Gbps each; Maluku --> 5 Gbps; Papua --> 3 Gbps

The current project's status as reported by some newspapers is listed below:

• The government has coordinated the creation of a consortium consisting of six (6) entities, including all the major operators, for the initial implementation of the PALAPA RING in the eastern part of Indonesia (Telkom, Indosat, XL, Infokom Elektrindo, BTEL, Powertek Utama Internusa,Nusantara Ekaprana Teknoguna Kelola). The spokesperson of the consortium Rakhmat Junaidi (currently BTEL) said "We are about to finish the terms and conditions for the procurement and are hoping to invite bidders mid February" (2008). The bidding is expected to only cover the construction of 9,345 kilometers of undersea and 857 kilometers of underground fiber-optic cables in the eastern part of the archipelago.

• The Directorate General of Post and Telecommunication spokesperson, Gatot S. Dewa Broto, said that the fiber optic network in eastern Indonesia has the capacity of 20 Gbps with investment totaling USD 300 mn.

Singapore : The Regional Teletraffic Junction

For economical, political, geographical and possibly many other reasons Singapore has established itself as a major telecommunication hub in Asia. Almost all international submarine cables to/from Asia pass through, terminate in or branch to Singapore. This includes e.g. SMW3, SMW4, FLAG, TIC, EAC, C2Ccn, APCN. Singapore has three cable landing points. Cable landing stations in Tuas serve for cables coming from the west (Europe, Middle East, South Asia). Cables going to the East Asia, ASEAN, Australia and the US are originated from either Changi (eastern Singapore) or Katong (south).


This surely has positively influenced the telecommunication sector in Singapore. According to Wikipedia & IDA, with a populaton of 4.2+ mn Singapore has:

• 1.8+ mn fixed lines (2006)
• 4.6+ mn mobile subscribers which are served by 3 operators (2006)
• 2.3+ mn Internet users (2006); served by 8 ISPs
• 760+ thousands broadband users (2006)
• 480+ thousands Internet hosts (2003)

Onnet vs. Offnet

This post shall actually be published one day in March :-) I haven't remembered precisely anymore the thing I want to address except that as indicated by the title. Maybe I'll just go for a rough idea.

I was trying to model traffic (relations, matrices, etc.) between operators. To obtain realistic results I had to assume a quite high factor for onnet traffic. That onnet traffic shall be higher than offnet, it is intuitively justified, because the operators always try to increase their customer base with many attractive marketing efforts, pricing schemes or other policies. Rough speaking, I had to use onnet factors in the range of 0.60 to 0.75. This was, informally, justified by some technical persons in the operators.

Recently, in a local/regional newspaper somebody said that "offnet traffic is still higher than onnet traffic though after promotional and marketing efforts" (-they don't charge for onnet traffic-). Is that really true ?? They said that onnet traffic comes at most to a figure around 40%. Right now, I could not give some numbers to argue against this. If this would really be the case, then in the traffic models between operators several things have to be taken into account:

• onnet and offnet traffic factors shall be a function of customer base
• types of networks (mobile cellular, mobile FWA)
• etc. ?
  

Below are some facts from the press:

• Flexi Jawa Barat, Banten --> onnet 40%; approx. 500.000 subscribers (around 5% of the total mobile/FWA subscribers in Jabar, Banten)
  

Indonesian Telcos : The Map (1)

In this post I want to give a global map of the current telecommunication players in Indonesia. This is not intended to give a complete profile of the telcos but just to implicitly mention how competitive is the domestic telecommunication market todays. The figure above shows the dominant players. Several facts are worth to be noted.

First, the wireless access technology has won the 'game' :-D . Wireless telcos would still be able to pay their employees even though they give away their voice services for free (SMS is the King!).

Then, the development of wired access infrastructures is slow because CAPEX is higher (compared to wireless). The operators would surely more focus on FWA and leave the 'traditional' fixed line access infrastructures behind. The 'war' in this area would be more intensive in the near future e.g. due to new FWA players (some operators are currently applying for a license).

Finally, the competition for network services in some major metro areas is higher than that several years before. The same is also expected for long distance network services in the upcoming months.

AAG : Something New ?

Several days ago I was 'googling' for the AAG - Asia America Gateway - submarine cable system. I just want to update myself with (and was expecting to find) some new information about it. Almost one year ago, I heard for the first time about this project just a while after many asian countries were healed / relaxed from the effect of the Taiwan's earthquake on Dec 2006. At that time, I wrote a short article about it in a local newspaper.

Unfortunately I do not find much new information. It seems that currently AAG doesn't have any official websites either.

Sofar, Google provides the following information for the AAG projects:

• The AAG network is owned by a consortium formed by 10 parties including the Government of Brunei, AT&T, Bharti, CAT, PLDT, PT Telkom, Telekom Malaysia, Telstra, StarHub and VNPT (alcatel-lucent.com 09/2007, a different version of the consortium's membership is issued by a press release document from Telekom Malaysia dated 04/2007, which names 17 telcos). It will link Malaysia to the U.S. via Singapore, Thailand, Brunei, Vietnam, Hong Kong, the Philippines, Guam, Hawaii and the West coast of the US (see the picture).
• The AAG is intended to compliment existing cable systems like the Asia Pacific Cable Network 2 (APCN 2) & Japan-US Cable Network currently connecting to North America via North Asia. This would increase connection diversity and survivability.
• Maximum design capacity of 1.92 Tbps; initial capacity of 480 Gbps
• one cable (with possibly 8/24 or 4/48)
• Length of the cable : around 20,000 km (half of the length of the equator)
• Contractors : Alcatel-Lucent (ASN), NEC Corporation
• US Landing : the AT&T 03 cable station (San Luis Obispo)
• Investment : ca. USD 500 mio.
• Regeneration distance : 76 km
• Date of service : late 2008
• Minimum lifetime : 25 years

If you look at the picture above, from Indonesia's point of view, it seems that both Telkom and Indosat will use their existing submarine cables to connect to either MY or SG. Telkom might use either its DMCS (Dumai Melaka Cable System) or its TIS cable.

Indonesian Telcos' Customer Base (2006)

As of 12/2006, Indonesia has around 78 millions telecommunication subscribers. Since around 8 millions are fixed-line subscribers, 70 millions thereof are wireless and cellular telecommunication customers.

With regard to customer base, the five biggest telcos in Indonesia are : Telkomsel, Indosat, Telkom, XL and Bakrie Telecom. The situation right now may differ. However, they still the major players in the domestic telecommunication market.

As can be seen from the table at the left, according to the number of customers, Telkomsel dominates with more than 50% market share.

Metro and Access Infrastructures

In providing metro connectivity services, Telkom and Indosat are accompanied by other players. Although they have still a dominant market share, several ISPs and new entrants have entered this market in several cities, especially providing metro IP-based services.

Traditional fixed-line (telephone) access infrastructures are still (almost 100%) owned and operated by Telkom. Other operators including Indosat prioritized development in wireless fixed lines, which obviously need smaller capital investments.

In terms of the number of players, wireless access infrastructures (including cellular and Internet hotspot) are the most prominent market. Telkomsel, Indosat and Excelcomindo are the dominant players. But Telkom (Flexi), BTel, Mobile-8 and several ISPs have still a quite significant number of customers.

Infrastructures for broadcast distributions have emerged since more than 10 years ago. The dominant player in this segment is Media Citra Indostar (Indovision), which owns and operates the Cakrawarta satellite. Terrestrial cable distribution networks are also built by some local providers. Such networks are currently also being used for offering Internet services.