The document is an agenda for an AmCham Singapore event on September 8, 2010 about the telecommunications industry in Southeast Asia. The agenda includes an overview of the telecommunications industry in Malaysia, Vietnam, and Indonesia with case studies on each country's mobile and broadband growth. It also provides statistics on mobile and broadband subscribers and revenue in the region.

1. AmCham Singapore
The ASEAN
Telecommunications
Industry
Prepared for:
The American Chamber of Commerce in Singapore
(AmCham Singapore) event
Date:
8 September 2010
Prepared by:
Prepared for: AmCham Singapore Date: 8 September 2010 Page 1

2. Today’s Agenda:
Asia Pacific Telecommunications Industry
Overview of Telco Industry in Malaysia & Vietnam
Case Study: Indonesia’s Telco Industry
Conclusion
Prepared for: AmCham Singapore Date: 8 September 2010 Page 2

3. Asia-Pacific Telecommunications
Industry
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4. Telecommunications in the Asia-Pacific
Asia-Pacific Cellular Subscribers 2009
47% of 5 billion global mobile
South Korea connections in Q2 2010 came from the
China Asia Pacific region.
47.5 Million
747.38 Million Japan
India 110.62 Million
525.15 Million Vietnam TOP 5 COUNTRIES IN ASIA
PACIFIC:
111.4 Million Philippines
Thailand
Malaysia 72.8 Million #1 CHINA
69 Million
30.4 Million
Singapore
Indonesia #2 INDIA
6.9 Million
193 Million
#3 INDONESIA
Australia #4 VIETNAM
South East Asia
25.5 Million
represents
approximately 25-30% of #5 JAPAN
the total cellular market.
Source: Published reports from GSM World, International Telecommunication Union, various journals & articles, and Spire’s data & analysis.
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5. Overview
Population & Teledensity
Statistics 2009 Indonesia Malaysia Vietnam
Population 231.37 million 27.9 million 86 million
Households 58.4 million 6.3 million 18 million
Cellular Subs 193 million 30.4 million 111.4 million
Broadband Subs 4.4 million 16.9 million 2.97 million
Population Teledensity
Cellular 83.4% 108.9% 129.5%
Broadband 1.9% 60% 3.5%
Source: Statistics Indonesia, Department of Statistics Malaysia, General Statistics Office of Vietnam, Internet World Stats.
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6. Overview
Malaysia – Indonesia – Vietnam
VIETNAM INDONESIA MALAYSIA
Late Technology adoption: 10 GSM & CDMA operators 4 mobile operators.
3G services in 2009. 176 ISPs (registered to 6 ISPs (Fixed Broadband).
Indonesian Internet
4G development plan in 4 Wimax operators.
Service Provider
2010
Association in 2007) Government to target 50%
Currently has 6 licensed household penetration by
1st Wimax operator 2010.
cellular operator & 4 ISPs. 2010.
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7. Telecommunications in Vietnam
ROADMAP TO 4G
1992 1999 2003 2005 2009 2010
Establishment CDMA Rolling out of
of mobile entered the 3G mobile
market in market licenses
Vietnam
Prepaid Mobile Development
service operators of 4G (Wimax
entered the started to push or LTE) plan
market for the
implementation
of 3G
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8. Telecommunications in Vietnam
CAPTURING THE 3G MARKET
With the recent rollout of 3G
Others licenses, the opportunity for
CDMA 1% Vietnam’s mobile market is still
OPERATOR high in terms of data services.
S-Fone
6%
BlackBerry
MARKET
Vinaphone service brought
LEADER
by Viettel in
24%
Viettel October 2008
End of 2009 44%
111.4 million subs
STATE-
OWNED
Viettel-Apple
Mobifone signed the deal
25% to sell iPhone in
January 2010
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9. Telecommunications in Vietnam
RAPID DEVELOPMENT IN RECENT TIMES
US$ 5.9 Billion
Having started off slowly, Vietnam’s mobile market has become
very competitive. Leading operators work hard to attract more
customers while retaining the existing ones.
TARIFF US$ 3.9 Billion
WAR II
US$ 2.7 Billion
TARIFF
WAR I
US$ 1.4 Billion
US$ 0.95 Billion
Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue based on industry data in VN.
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10. Telecommunications in Malaysia
MOBILE OPERATOR CONSOLIDATION
In the 1990s, there were 7 operators serving a population of around 20 million in Malaysia.
This resulted in oversupply.
TM Cellular
TM Celcom TM
Celcom TM Celcom
Celcom Axiata
MobiKom MobiKom
DiGi DiGi DiGi DiGi
Maxis
Sapura Maxis Maxis
TimeCel
Time
1990s 2002 PRESENT
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11. Telecommunications in Malaysia
50% BROADBAND PENETRATION BY 2010 Malaysia has one of the more advanced
U Mobile telecommunications networks, with the
2% availability of technologies such as fiber
optics, Wimax, digitalization & satellite
services.
Digi
25%
Maxis
40%
End of 2009 Mobile operators
30.4 million subs offering Mobile
Broadband services.
P1 Wimax became
the first operator to
Celcom launch
commercial
33%
Wimax services in
August 2008.
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12. Telecommunications in Malaysia
3G TO BRING NEW SPARK IN THE MARKET
Malaysia’s mobile market has almost “paused”. 3G is expected US$ 6.6 Billion
to push market growth. US$ 6.3 Billion
US$ 5.7 Billion
US$ 5.1 Billion
US$ 4.6 Billion
Source: Players’ financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue from 3 largest operators, represents at least 95% of the market in MY.
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13. CASE STUDY ON INDONESIA
40 million internet users, only 15-20% subscribed to internet service.
1.4 million BlackBerry users as of Q2 2010.
55,000 iPhone users (operator bundled).
3,000 iPad users (yet to be officially distributed in Indonesia).
WORLD’S LARGEST SOCIAL
NETWORKING USER
Ranked #6 in the top 20 for Tweeting
activities.
Jakarta: the Twitter capital in Asia.
The 3rd largest Facebook country,
with 26.2 million Facebook users.
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14. Current Market Situation
REACHING MARKET SATURATION Indonesia is an emerging market in the
Telco industry. It is predicted that the
Bakrie growth rate for 2010 will be around 10-11%
Telecom compared to 2009.
Others
6%
11% Estimated dual card user = 1 : 1.7
LEADING
CDMA GSM operators: targeting the
OPERATORS YOUTH segment
Telkom Flexi Telkomsel
8% 42%
End of 2009
MARKET
193 million subs LEADER
XL Axiata
16%
CDMA
COMPETING
FOR POSITION
Indosat operators:
#2 17% more into
“affordability”
Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis
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15. Current Market Situation
DECLINING TARIFF, HIGHER PENETRATION
The mobile market has seen strong US$ 11.1 Billion
growth. The launch of 3G networks US$ 10.5 Billion
has received a good response from US$ 9.5 Billion
the market.
US$ 7.8 Billion
US$ 6.4 Billion
Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue from 5 largest operators, represents at least 80% of the market in ID.
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16. Cellular Subscribers Growth
OVER 200 MILLION SUBS AS OF Q2 2010
“Minutes
208,000,000
Factory”
193,000,000
Tariff war & New
Interconnection 162,000,000
regulation
Rise of Mobile
Internet &
BlackBerry “fever”
Q2'08 Q3'08 2008
Q4'08 Q1'09 Q2'09 Q3'09 2009
Q4'09 Q1'10 2010
Q2'10
Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis
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17. Broadband Market Milestones
2009
2007 EVDO entered the
market. Unlimited 2010
Mobile Broadband access and prepaid
Internet entered the scheme still in high
market - a new Roll out trial of 1st
demand. Wimax operator. The
opportunity for telco
operators with the market still tends to
market saturation of revolve around
2006 prepaid unlimited
voice & SMS.
access. With the
The rise of Broadband various packages
internet, pioneered offered, the market is
by Telkom Speedy, becoming more
offering affordable aware of the service
access amidst of high 2008 quality offered.
priced services.
Prepaid unlimited
access introduced to
the market by IM2,
successfully captured
large market share.
Mobile Internet entered the market not long after Fixed Broadband entered the market.
Fixed broadband penetration remains low, while Mobile Broadband penetration grew.
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18. Data Services Revenue
RISE OF MOBILE INTERNET SERVICE
INCREASED DATA REVENUE DRIVEN BY:
Data
2,311.41
Popularity of social networking application and Instant Messaging
22%
supported by affordable phones, built by local manufacturers.
2008
Revenue in million USD
Cellular &
Others
8,167.5
78%
The growing number of BlackBerry, iPhone and Android users.
Data
2,855.5
26%
2009
Cellular &
Others Growing market for CONTENT and ONLINE GAMES, such as MMORPG,
8,289.52 which triggers the development of local content providers and local
74% online games.
Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue from 5 largest operators, represents at least 80% of the market in ID.
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19. Broadband Subs Growth
REACHED 7 MILLION SUBS IN Q2 2010
5,000,000
3,000,000
Device bundling Looking at the demand
Market demand shifted packages for unlimited service,
to Mobile Broadband, promotion ISPs started to offer the
offering affordable and scheme same scheme as
Prepaid
easy-to-access service “Unlimited” Mobile Broadband
5,000,000
using USB modem service
device
3,770,000
1,720,000
770,000 1,410,000
3,000,000
Fixed Broadband
2,100,000 Mobile Broadband
550,000
1,470,000
1,040,000
Q2'08 Q3'08 Q4'08 Q1'09 Q2'09 Q3'09 1,720,000
Q4'09 Q1'10 Q2'10
670,000 770,000
2008 1,410,000 2009
1,560,000 2010
470,000 1,200,000
870,000 990,000
*Source: Vendor financial reports, Secondary sources, Spire Internal data & analysis
550,000
340,000 400,000
Prepared for: AmCham Singapore
Q2'08 Q3'08 Q4'08 Date: Q2'09
Q1'09 8 September 2010 Q4'09
Q3'09 Q1'10 Q2'10 Page 19

20. BlackBerry Subscribers Growth
OVER 1.4 MILLION BLACKBERRY USERS IN Q2 2010
Further reducing
BIS tariff ranging 1,420,000
below US$10.
Introducing
limited BlackBerry
service
BlackBerry BlackBerry on
Internet Demand: daily,
Service weekly &
offered at monthly tariff
US$ 15-20
Q2'08
Q3'08
Q4'08
Q1'09
Q2'09
Q3'09
Q4'09
Q1'10
*Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis Q2'10
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21. Broadband Growth Penetration
THE HIGHEST GROWTH IN JAVA REGION
+189%
NORTH
SUMATERA +102%
EAST KALI-
MANTAN
The growth rate in the
eastern part of Indonesia is
+244% considerably lower,
+206% affected by the lack of
WEST Information Technology
GREATER +244%
JAVA development in the area.
JAKARTA EAST JAVA
+78%
BALI
+308%
CENTRAL
JAVA
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22. Online Games Market in Indonesia
FROM LICENSING TO DEVELOPING LOCAL GAMES
End of 1st Phase 2nd Phase
First-person Shooter
Action-
fighting
Facebook
Golf 3D
Local Game
1st
3D
Music
game
2003 – 2004 2005 2006 2007 2008 2009 NOW
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23. In Conclusion…
INDONESIA’S MOBILE AND BROADBAND MARKET WILL STILL SHOW A STRONG GROWTH
Operators will likely to continue to MONETIZE the traffic, encouraging usage by offering
bonuses to subscribers. The mobile market is expected to reach 360 million subscribers by
2015, with penetration of 144% of the population.
Despite the saturation in the cellular market, the broadband market still has high potential to
grow. With growing broadband subscribers, operators will need to increase bandwidth
utilization. Implementation of NEW TECHNOLOGIES such as WiMax, EVDO Rev. B and LTE are
expected to happen over the next 5 years.
The success of 3G services in the market will depend on the ability of operators to offer
desirable content that consumers are willing to pay for. Games developers, Application
Service Providers and leading content and media providers will also benefit from 3G services.
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