"In Indonesia, Bakrie’s CDMA brand has a strong position and the quantity of our customers increases rapidly. We think Huawei’s innovative industry-leading All-IP networking solution, with its advanced flexibility will continue to meet our requirement of network development, and help us realize maximum benefit in TCO saving and network operation.”
--Anindya Bakrie, CEO of BTEL
Bakrie Telecom believed that they could make a strong contribution to the welfare of rural Indonesians by providing low-cost voice and data communications. The initial service was expected to grow quickly, but it had to be deployed cost-effectively. Huawei was able to provide a core system that could be quickly implemented and grow easily, allowing Bakrie Telecom to succeed with their socially-conscious program.
Focus on Social Responsibility
Bakrie Telecom has been one of the pioneers in Indonesia's telecommunication industry and the fastest growing wireless telecom operator in Indonesia with 150% annual growth rates. Bakrie is also the leader in providing affordable fixed wireless voice and data services to customers. Using spectrum-efficient Code Division Multiple Access (CDMA) technology, Bakrie Telecom is becoming a nationwide operator with its Esia, wifone and Wimode brands. From the beginning of delivering services in three provinces, Bakrie Telecom has expanded to more than 50 national cities during 2008. The company was also awarded an international long distance license from the government.
Micro-finance Meets 3G Wireless
Bakrie Telecom’s corporate mission is: “Telecommunication is a birthright for every Indonesian. Customers deserve reliable yet affordable telecommunication services.” They chose to begin offering service to poor rural communities, focusing on a largely untapped market space with less than 60% penetration. Their initial offering was the Uber Esia program in 2008, a joint project with the Grameen Foundation founded by Nobel Peace laureate Dr. Mohammad Yunus, and Qualcomm. The Uber Esia program will enable microfinance clients to borrow the money needed to purchase a Village Phone ‘business in a box’ to help the poor improve their purchasing power. The Village Phone package consists of a 3G CDMA-based mobile phone and charger, marketing materials, tariff posters, business cards and training materials.
The Uber Esia program, targeting the poor rural communities in a nation composed of thousands of islands is a daunting task. Without support for broad network coverage and a cost-efficient architecture, the Uber Esia will have no chance to succeed. Most poor rural communities exist in islands such as Kalimantan, Sulawesi, Maluku and Irian Jaya, as well as the interior areas of Java and Sumatra far away from big cities. Complex geographical circumstance, full of tropical rainforests, islands and mountains in most of the rural regions, create a very complex puzzle for Bakrie Telecom.
Bakrie Telecom began as a small local operator, but after 5 years they had added additional regional licenses, until they won a nationwide license in 2007. During the growth, Bakrie rented a large number of offices and transmission capacity in order to quickly move into markets. But expanding the network coverage by scaling up the network resulted in a more complicated network structure because of their TDM-based Core Network. The resulting increase in CAPEX and OPEX threatened to stifle growth.
Optimize All-IP in Difficult Environment
Determining the best network design for the future was a challenge. Not only did the current, complex structure need to be addressed, but there also needed to be an architecture that met the needs for future growth. A corporate evaluation of future strategy was undertaken, resulting in a focus on the need to provide more services in the future. The decision was made that an All-IP architecture was the right choice for BTEL.
Moving to All-IP was the right choice, but it would be complex to implement, given the special limitations caused by geography, the construction environment and the high cost of deployment. BTEL needed an outstanding partner to help carry out an All-IP transformation as quickly as possible, allowing the benefits of All-IP transformation to be realized in the shortest time, reducing the cost and increasing the quality of the network.
Creative Use of Advanced Technology Saves the Day
The major obstacles to deployment of an advanced, All-IP network were the facilities and equipment cost for the many offices and the cost of acquiring IP transmission facilities throughout remote areas. To alleviate these problems, Huawei created a customized All-IP mobile core network solution for Bakrie. By creatively reusing existing resources in the network, the construction investment was reduced and the implementation time was shortened, thus substantially reducing CAPEX and OPEX.
Deploying Huawei’s high density, All-IP mobile softswitch reduced the number of equipment rooms and the equipment room size, producing substantial savings in not only the building costs, but also in associated power transformers, standby power supplies, and cooling systems.
By using IP over E1 technology, Huawei made it possible for the TDM network to carry IP packets. In addition, advanced bandwidth compression technology was used to increase the capacity of the existing transmission network by over 8 times. This substantially reduced both CAPEX and leasing costs. In the densely populated city of Bandung, Bakrie constructed the largest IP over E1 network in the world, on the existing E1 trunks. The resulting network has 20 media gateways (MGWs) connected through IP over E1.
Making full use of existing resources relieved Bakrie from many pressures of the external environment, allowing them to forego the time-consuming negotiations and public hearings required to get permission to build in sensitive tropical rain forests and mountains, as well as the costs of the actual construction. Thus, Bakrie Telecom could put the network into commercial use in record time to seize a critical opportunity. For example, in Bandung, the first-phase project consisting of construction of the core network, access network and evolution to IP transmission, was completed in only 3 months.
Low Prices, Low Churn and High Quality
Intelligent implementation of the All-IP strategy has allowed Bakrie Telecom to offer extremely competitive prices, while having an ultra-reliable network that can handle the rapid growth in users. Bakrie pricing is almost the lowest in Indonesia at IDR 3000 (about USD$0.33) per hour for the use of services, and set a record of zero call drop rate in 100 hours in the KPI test conducted on March 17, 2007. The excellent network services and affordable charges naturally attract a large number of users. By 2007, the number of users had hit 3.82 million, a year-on-year increase of 147%!
According to the survey conducted by the authoritative test agency of Indonesia, the churn rate of Bakrie Telecom is only 4%, much lower than the average rate of 12% in the country. According to the survey on brands and ad effects, 66% of users are willing to recommend the CDMA services provided by Bakrie Telecom. Esia, the company's brand, has ranked the first in the industry. Thanks to its outstanding performance, the company was awarded "Best CDMA Operator 2007" at the Indonesian Cellular Show.
Success from Focusing on Core Values with a Strong Partner
The innovative, and socially responsible strategy to combine Dr. Yunus’ microcredit method with 3G services for the poor rural communities offered the opportunity for big dividends. Implementing the strategy, especially in the complex geography of Indonesia was a daunting challenge. Meeting this challenge required a faith in the soundness of the All-IP network architecture and the assistance of a partner with skill, an innovative spirit and a commitment to success.
The partnership of Bakrie Telecom and Huawei Technologies met the challenge and the result is an All-IP network which enabled Bakrie to combine low price and outstanding network performance to attract a great number of subscribers.
