Dinamika Persaingan Industri

Telekomunikasi
Kuliah Umum

Mas Wigrantoro Roes Setiyadi

Ketua Masyarakat Telematika Indonesia (MASTEL)
maswig@insteps.or.id

Jakarta, 31 Oktober 2007

Profile MasWig
Pendidikan
• Sarjana Teknik Informatika, Univesitas Budi Luhur (d/h STMIK Budi Luhur), 1992
• Sarjana Ekonomi, Universitas Indonesia, 1996
• Master in Public Policy, National University of Singapore, 2000
• Magister Sains Akuntansi, Universitas Indonesia, 2002
• Kandidat Doktor, Program Studi Ilmu Manajemen, PPS-FEUI

Profesi / Jabatan
• Wakil Direktur Utama, PT Pratama Jaringan Nusantara
• Direktur Institute for Technology and Economic Policy Studies <<INSTEPS>>
• Ketua MASTEL
• Dosen Pasca Sarjana:
– Universitas Prof. Dr. Moestopo (Beragama): Perkembangan TI & Komunikasi
– Universitas Budi Luhur: Ethics & Cyberlaws; Strategi Sistem Informasi / TI

11/02/21 maswig for UI 2

Agenda

• Scope of Telecommunication Discourse

• Current business environment
• Industry Competitive Analysis
• Competitive Dynamics
• Strategy to Win Competition
• Q&A

11/02/21 maswig for UI 3

Lingkup Kajian Telekomunikasi
Telekomunikasi

Kebijakan & Implikasi

Teknologi Ekonomi Hukum
Regulasi Sosial

Jaringan Struktur UU Lisensi Internasional

Media Conduct PP. USO Digital Divide
Transmisi
Kinerja PerMen Tarif Teledensitas
Transmiter
Investasi Perda. BHP Manfaat
Receiver
Layanan KepDirjen Standar Perilaku
Protokol
Nilai Dll. Interkoneksi Dll.
Modulasi Ekonomi
Landing
Signaling Dll. Right
Interkoneksi VAS
VoIP Mobilitas
Dll.
11/02/21 maswig for UI Dll. 4
The Operators business environment

• Threats and opportunities

• Shifts in consumers behavior

11/02/21 maswig for UI 5

Confusion in both media and telecom markets
Business dynamic that impact operators business strategy

11/02/21 maswig for UI 6

 Changes in consumer behavior
• Always on
Call Forwarding -> Mobile -> Internet -> Mobile TV
• Presence based services
- How to be reachable
• Mobility
- Roaming, WiFi handover, Service Portability
• Service usage
- e/M-commerce, data, multimedia
• Payment models changing
- Point Of Sales, Realtime Charging, Prepaid
Combinations

11/02/21 maswig for UI 7

 The service ecosystems…
• Consumers …
– Wants: simplicity, usability and access to the “Net” and cool things.
– Consumption is rapid and instant
– Access is just expected wherever I am

• Application (service) providers …

– Communication network is simple the channel to reach customers.
– Target to keep customers always on, regardless of network, location or
terminal.
– Advertising is a vital source of revenues.

• Operators …
– Keep customer loyal and increase service usage, ARPU.
– Consolidation of production environments to lower OPEX in an
increasing competitive market.
– The true challenge is to move towards a common strategy for service
delivery towards; Broadband, Fixed and Mobile networks.

11/02/21 maswig for UI 8

Convergence from a users perspective
Terminal: The terminal at hand present the
service I want to access.

Access: Best possible network resource is

engaged to access the service.

Service: Based on the service type, bandwith,

method of presentation set the rules how to
present the service

Subscription, Authentication,
Accounting…

11/02/21 maswig for UI 9

Technology shift and uncertainties
• Web 2.0
– True personalization impacts the expectation of
communication
– RSS and bloggs are used over any media
– Communities and IM replace traditional communications
– New business models (mainly advertising driven)
• Telco
– An all IP-based world will create new business models
– New communication providers change the business models
– The business model is threatening traditional telecoms
– For many subscribers, price combined with presence is
currently more important than quality.

11/02/21 maswig for UI 10

“Coverage is king” regardless of access
technology

11/02/21 maswig for UI 11

Telco Business trends
Convergence aspects
• Terminal – Multi network access, multimedia
• Network – Converged network for any service
• Services – Mashups, service Portability
• Access – Core network must support different access
methods

Convergence is more than an aggregated bill

• Combination of services that adds value to the customer
• Operational synergies
• New market opportunities
• Play higher in the value chain

11/02/21 maswig for UI 12

 Telco Business Challenge
• Captive Market
• Relatively homogeneous portfolio
• Thick margin
• Sole player
• Supporting roles
• Passive business approach

• Competitive market
• Relatively heterogeneous product
• Thin margin
•Multi players
•Creative partnership
• Leading roles
11/02/21
• Proactive business developer
maswig for UI 13
Short term issues and key business
objectives
Short term issues
• Core production systems reaches its “end of life”
• Long process to introduce changes customizations in today’s
production environment.
• Different service platforms for different networks, Fixed,
Mobile and IP networks

Key objective in business decisions

• Supports and enhance core business and then operators
competitive edge.
• Supports migration towards NGN architecture
• Allow for flexible and open service development environment
• Having the ability to introduce new service rapidly

11/02/21 maswig for UI 14

Alternative revenue stream’s impact on
my business
Advertising and new business models will constantly impact operator’s
traditional business model.
Example: Starbucks – iPhone – iTune concept will compete with traditional
download bus

11/02/21 maswig for UI 15

 Structure - Conduct - Performance

• Industry Competitive Analysis

11/02/21 maswig for UI 16

 Industry Structure
Number of competing firms
Homogeneity of product
S-C-P
Cost of entry and exit

Firm Conduct
The Structure Conduct
Price taking Performance
Product differentiation
Tacit Collusion Model (Barney, 2007)
Exploiting market power

Performance
Firm Level: normal, below normal,
above normal preference
Society, productive and allocative
efficiency, level of employment, progress
11/02/21 maswig for UI 17
Market Structure

The ways in which the structure of an industry

react to, and reflect, the underlying influences of
technology and preferences
Types Industry Structure, Firm Conduct Option, Firm Performance, and
Social Welfare Implications (Barney,2007)
Social
Type of Firm Conduct Expected Firm
Industry Attributes Example Welfare
Industry Option Performance
Implcation
Perfect Large number of Stock market Price Taking Normal Social
Competition computing firm Crude oil welfare
Homogenous maximal
products
Low-cost entry and
exit
Monopolistic Large number of Tooth Paste Product Above Normal Less than
Competition computing firm Shampoo Differentiation perfect
Homogenous Golf ball (see Chapter 8) competition
products Automobiles
Low-cost entry and
exit
Oligopoly Small number of U.S steel and Collution Above Normal Less than
computing firm autos in the (see Chapter monopolistic
Homogenous or 1950s 10) competition
Heterogenous U.S breakfast
products sereal
Costly-entry and
exit
Monopoly One firm Tooth Paste Product Above Normal Less than
Costly entry Shampoo Differentiation Oligopoly
11/02/21 maswig for UI 19
 Indonesia Telco - Market Structure
INDUSTRY SEGMENT SERVICES LEGAL STATUS OPERATOR(S)
INTERNATIONAL GATEWAY Kompetisi Indosat, Telkom, Esia
PUBLIC SWITCH Fix Wireline Duopoly Telkom, Batam-Bintan Telkom
TELEPHONE NETWORK Fix Wireless Kompetisi Telkom, Indosat, Esia
DOMESTIC CDMA-450 Regional License Sampoerna Telekomunikasi
Telkomsel, Satelindo, Excelcom,
Mobile GSM Kompetisi NTS, 3
Telkomsel, Satelindo, Excelcom,
3G Kompetisi NTS, 3
CDMA Kompetisi Mobile-8, Smart
Long Distance Monopoly Telkom
INFRASTRUCTURE TERRESTRIAL Kompetisi Semua Operator
SATELLITE Kompetisi Satelindo, PSN, CSM, Telkom
VALUE ADDED SERVICES Data Com, ISP, Payphone, etc. Competition Licensed operators
(Network)
SPECIAL NETWORK VSAT, Trunking Competetition Licensed operators
PRIVATE NETWORK No Resale Any Private Companies
Telephone Swicth
Transmission
MANUFACTURING Broadband Switch Competetition Any Companies
CPE

11/02/21 maswig for UI 20

Penyelenggara Telekomunikasi
Pelanggan kartu pra bayar menurut Operator
Telekomunikasi pada Tanggal 25 Juli 2007
Sampoerna
Telekomunikasi Natrindo; 9.590;
Bakrie Telecom;
Indonesia; 198.000; 0%
1.997.127; 2%
0% Hutchinson;
1.057.338; 1%
Mobile-8;
2.175.731; 2% Telkom;
13.301.000; 15%
XL; 9.743.245;
11%

Indosat; Telkomsel;
19.636.990; 22% 41.001.000; 47%

Sumber: Dirjen Postel

Competitive Dynamics

• Actions - Reactions
• Strategic Moves
• Make profit > Competitors
• Sustainable Competitive
Advantage

11/02/21 maswig for UI 22

Telco Business Character
FUND

TECHNOLOGY

REGULATORY

BUSINESS STRATEGY

Adopted from: Rudiantara, 2003

11/02/21 maswig for UI 23

Network Externalities

• the value of a unit of the good increases with the

number of units sold
• the value of a unit of the good increases with the
expected number of units to be sold
• externalities arise in the act of exchanging assets or
goods.
• externalities may arise in the array of vertically
related services that compose a financial
transaction.

11/02/21 maswig for UI 24

The Five Force Model of Environmental

Threat of Entry Threat of rivalry

Threat of Level of threat Threat of

Supplier in an industry Buyer

Threat of
Substitutes

11/02/21 maswig for UI 25

What do we want to be?
Not, What do we want to do?

Competitive Profits above average regional countries.

Advantage Adopted from Coff (1999) & Powell (2001).

Products and services better than country-

Distinctive competitors do
competence Adopted from Ansoff (1965), Andrew (1971).

Core Resources create variety of products, gain

competence higher revenue.
Adopted from Prahalad & Hamel (1990).

11/02/21 maswig for UI 26

Strategic decisions

11/02/21 maswig for UI 27

 Dynamics of Competition (1)
• Process of competition over time
• Erosion of competitive advantage
– Changes in five forces
– Competitors overcoming adverse forces
• Cycles of competitive response
– Slow: long periods of established pattern of
competition
– Fast: hyper competition, constant disequilibrium
and change
11/02/21 maswig for UI 28
 Dynamics of Competition (2)
• Implications of speed of competitive cycle:
– Slow-moving - build and sustain competitive
advantages which are difficult to imitate
– Fast-moving - advantage is temporary, disrupt
status quo, sequence of short-lived moves

11/02/21 maswig for UI 29

 Cycles of Competition

Source: Adapted with the permission of the Free Press, a Division of Simon & Schuster, from R.A. D’Aveni with Robert Gunther, Hyper –
Competitive Rivalries: Competing in a Highly Dynamic Environment © 1994, 1995 by Richard A.D’Aveni, All rights resvered.
11/02/21
Exhibit 2.7 maswig for UI 30
Competitive Strategy

• Industrial Organization
(Outside In)
• Resource-based Theory
(Inside Out)
• Austrian School
(Hypercompetition)

11/02/21 maswig for UI 31

 The business idea

11/02/21
Exhibit II.i maswig for UI 32
Layers of the business environment
 Defining the strategy
• Who is my prime customer target?
– Business, Residential, Age group, ethnic groups…
• What network resources do I have that bring me competitive edge?
– Single network operator or
– Multiple network operator
• Prime services that must be protected?
– Services with limited competition
– Service that generate significant revenue
– Service that prevent churn

11/02/21 maswig for UI 34

 Membangun Strategi Bisnis
Menciptakan
Nilai Bagi
Konsumen
Usaha bangun Menanggapi
keunggulan daya perubahan lingkungan
saing politik, ekonomi dan
industri
Strategi R&D
Menjangkau
Strategi supply
Strategi
ekspansi
Str

chain management Bisnis

Geografis
a
teg
i

Strategi service/
Fu

Kolaborasi,
ng

Manufacturing kemitraan,
sio

Strategi Pemasaran aliansi strategik

na
l

Strategi SDM Moves proaktif

ungguli pesaing
Strategi Keuangan

11/02/21 maswig for UI 35

Sumber: Thompson & Strickland (2003)
Dr. Albert Widjaja, FEUI, p. 8.
 Telecommunication Value Chain

Equipment Supply Telecomm Infrastructure Service Development

Competitive Market Monopoly / Duopoly / Oligopoly Competitive Market

Telecom Equipment Internet

Computer H/W VAS

PTOs
Software Databases

Consumer Electronic Network Management

regulators will need to monitor the extent and significance of

competition in telecom markets, and take positive steps to reduce barriers to entry
wherever possible
11/02/21 maswig for UI 36
Strategic Groups

Strategic groups are organisations within an

industry with similar strategic
characteristics, following similar strategies
or competing on similar bases

11/02/21 maswig for UI 37

 Some characteristics for identifying
strategic groups

Sources: Based on M.E. Porter, Competitive Strategy, Free Press, 1980; and J. McGee and H. Thomas, ‘Strategic
groups: theory, research and taxonomy’, Strategic Management Journal, vol. 7, no. 2 (1986), pp. 141–160.

11/02/21
Exhibit 2.8 maswig for UI 38
 Identification of Strategic Groups (1)

• Scope of activities
– Product/service diversity
– Geographical coverage
– Number of market segments served
– Distribution channels

Sources: Based on M.E. Porter, Competitive Strategy, Free Press, 1980; and J. McGee and H. Thomas, ‘Strategic
groups: theory, research and taxonomy’, Strategic Management Journal, vol. 7, no. 2 (1986), pp. 141–160.

11/02/21 maswig for UI 39

 Identification of Strategic Groups (2)
• Resource commitment
– Extent of branding
– Marketing effort
– Extent of vertical integration
– Product/service quality
– Technological position (leader, follower)
– Size of organisation

Sources: Based on M.E. Porter, Competitive Strategy, Free Press, 1980; and J. McGee and H. Thomas, ‘Strategic
groups: theory, research and taxonomy’, Strategic Management Journal, vol. 7, no. 2 (1986), pp. 141–160.

11/02/21 maswig for UI 40

Uses of Strategic Group Analysis
• To understand who are the most direct competitors of an
organisation
• To establish the different bases of competitive rivalry
within and between the strategic groups
• To assess if an organisation could move from one group
to another
– Depends on barriers to entry
• To identify opportunities and threats
– Changes in the macro-environment may create
strategic space

11/02/21 maswig for UI 41

Cellular Industry Cluster

Users

Content Providers

Mobile Network
Dealers
Operators Mobile Application
Providers

Contract Specialized Services

Manufacturers Banking, Accounting,
Mobile Legal
Mobile Handset
Component Manufactures Infrastructure
And Equipment Manufacturers
Specialized Risk Capital
Suppliers

11/02/21 maswig for UI 42

 ?

11/02/21 maswig for UI 43

Q&A

Contact:
Mas Wigrantoro Roes Setiyadi
Email: maswig@insteps.or.id
Mobile: +6281876006
URL: http://maswig.blogspot,com & http://maswigrs.wordpress.com

11/02/21 maswig for UI 44