TERMS OF REFERENCE Republic of Indonesia Improving Rural Connectivity for Sustainable Livelihoods Project Community information and communication centers Needs assessment and development of a proposal for pilot projects A. Context Although Indonesia had made a breakthrough in modern communications--being the fourth country in the world to launch its own domestic satellite system--it is still lacking in providing information access to its far-flung areas, particularly in the Eastern part of Indonesia. The government, under the Universal Service Obligation (USO) program supervised by the Department of Communication (DEPHUB), is determined to provide access to approximately 43,000 un-served villages, with basic (telephony) services in a 3-5 year time period, with the cooperation of the private sector. At the end of the program practically all the 250 million inhabitants will have access at least for an easy reach of a public phone. It is crucial for Indonesia to keep up with the rapid development of the new information and communication technologies (ICT), for providing better and more convenient communication access, retrieving and disseminating information faster and more accurately, boosting business, and keeping up with the global development. At the same time it has to watch the even distribution of ICT means, nationally; unless it has to face another more serious communication gap, the increasing pace of the digital divide, within the country. The government has a firm intention to bridge in a short time period the increasing stark uneven distribution of ICT means between the big cities and the second tier cities, particularly the district capitals (Kabupaten/Kotamadya or IKK), and the majority of the third tier towns, the sub-district capitals (Kecamatan, or IKC), and in the longer time period the villages. The State Ministry for Communication and Information is responsible for planning and promoting the intensive development of Community Tele-Service Centers (CTC), Multipurpose Telecenters (MCT), or some times called Balai Informasi Masyarakat (BIM) to these areas. This equitable access for ICT on a phased basis would
provide a synergy of strength of the whole population in contributing to a more rapid overall national and economic development. Internet subscription in Indonesia currently (2000) totals less than 1% of the general population. Fixed line telephone service extends to fewer than 3% of households. Indonesia s position in ranking of readiness in IT usage in 2002 was 14 th (out of 16 countries in the region) based on an evaluation of technology infrastructure, business environment, consumer and business adoption, legal and policy environment, social and cultural infrastructure, and supporting e-services. Public access centers (aka CTCs, MCTS, BIMs) offer the most economical access to communications services in Indonesia as in the rest of the developing world. The numbers of users who access the Internet at Warnets and telephone services at Wartels far outnumber those who subscribe to such services. This fact reflects both the inadequacy of fixed line infrastructure, and the high cost of dedicated service. The objectives of the envisaged project are to: (i) (ii) (iii) Pilot approaches to developing partnerships (private-public/government- NGOs) with rural communities to form a sustainable model of telecenters for rural areas Develop approaches to improve access of rural communities (women in particular) to agricultural knowledge (extension, market, weather, credit, etc.) and other non-agricultural information through ICTs and concomitantly develop systems for the production and maintenance of this information Design new approaches to ICTs that will give voice to the rural poor in local decision-making and to improve transparency in governance. Components will include, inter alia, (i) training and capacity building of local governments and communities; (ii) information and communication equipment to be operated in rural communities; and (iii) operational support. If there are sufficient evidence that the project will be self sustained in a longer perspective (3-4 years), Japan Social Development Fund may offer a grant of up to 275,00 USD. The proposed grant will complement the World Bank s Second Kecamatan Development Program (KDP), one of the largest community-development programs in Indonesia. The KDP now covers 20,000 villages in all of Indonesia s provinces. The grant would (as far as possible) work in villages where KDP has been operational for at least two years so as to take advantage of the strengthened village institutions and the bottom-up planning processes that have been the cornerstone of the KDP s success. These KDP villages would have had the necessary capacity development through a sustained input of training and practical experience in basic technical, facilitation and administrative skills. B. Potential partners
The following preliminary sites/partner organizations have been identified: 1) Provincial Womens Cooperative Centers, East Java (PUSKOWAN-JATI) that is the provincial branch of the National Indonesian Womens Cooperative (INKOWAN). This is a national-provincial-local credit cooperative/social organization that supports women small business owners and women in general. Although a proposal was submitted to JICA for financing a MCT in E. Java, not much has materialized. 2) Agritani : The project which has been endorsed by ASEAN will provide farmers and producers direct access to key market information and a broad set of services through an electronic marketplace that will allow them to engage in trade and complete their transactions on-line. Farmers, refineries, food processing companies, supermarkets and retailers will be able to participate in the regional and global agriculture and food markets that today are only accessible by big institutional players. Designed as an efficient one-stop shop that will provide key services for complete trading in agriculture, the ASEAN efarmers hub will be integrated with major regional banks, financial services, transportation, shipping and handling, warehousing, certification and news services providers. It will provide e-marketplace solutions to support transaction of small and medium size agricultural enterprises, especially farmers cooperatives. In Indonesia, several sites involving hundreds of farmers cooperatives have been identified for the pilot launch. Many of these sites are in the province of Jambi. The e Farmers National Task Force In Indonesia now comprise of government and semi government organisations such as LIPI, Bank Rakyat Indonesia, Sucofindo, Ministry of Agriculture, Bulog, and the Department of Agricultural Cooperatives of Indonesia. The team will visit one/two sites in Jambi and/or S. Sulawesi. 3) Salatiga, Central Java - Serikat Paguyuban Petani Qaryah Thayyibah (SPPQT). This is an association of small scale farmers and traders which was established in 1999 by 13 farmer groups in the Salatiga, Magelang, and Semarang regencies, now has members of almost 11,000 farmer and trader households (data Sept. 2003) that forms 34 associations of 302 groups in 6 regencies and 1 municipality in Central Java. C. The assignment C.1 ICT environment Here are some questions you need to answer.
Does the current technical infrastructure (electricity, telecommunication, and information technology) constrain community access to ICT? Review technical options, including solar-powered and satellite-communication systems, to achieve connectivity at satisfactory quality in the selected communities. Compile services, coverage, quality, and prices of telecom operators and ISPs that you can find on the Internet and in the distributed papers. Which national policies and regulations need to be in place in order to guarantee viable telecenters in communities? Policy and regulatory issues Find out about Indonesian the telecom policy and regulatory environment. Some suggested references: - www.telkom.co.id/index.html?lid=en) - www.itu.int/asean2001/documents/ppt/document-6.ppt). - www.brunet.bn/eaga/aind.htm, Indonesia - Telecom Brief by Ken Zita (use Google), - Wi-Fi Innovation in Indonesia by Divakar Goswarni & Onno Purbo (www.regulateonline.org/content/view/737/31), - www.itu.int/itu-d/ict/cs/indonesia/material/idn%20cs.pdf Identify factors that will promote ICT development in rural areas and possible negative aspects where you may recommend changes. Find out the Digital Access Index (DAI) and Digital Opportunity Index (DOI) for Indonesia. Compare it with other countries at similar level of development to find out if there is room for improvement and, if so, what policies may be required to improve these values. Capacity Find out what you can about rural people s capabilities Typical educational background, literacy levels, computer skill levels, if possible by gender and age groups. Start searching for this information at www.unesco.org and http://www.uis.unesco.org/profiles/en/gen/countryprofile_en.aspx?code=3600 Content and services on the Internet, relevant to the needs of rural populations Collect as much information as you can about Internet content and services in Indonesia by searching the Web. What, if anything of this content or services would be relevant for people in the rural areas. Telecom Infrastructure and tariffs Identify connectivity options in Indonesia and make a preliminary proposal for how to provide connectivity in rural areas lacking copper cable infrastructure and with poor coverage of mobile cellular systems. Justify your preliminary choice of technology for connectivity. ISP market Find out about pricing, competition, etc in the Indonesian ISP market and discuss the implications for for Telecenters tariffs and affordability
1 USD = 9,100 Indonesian Rupees (IDR) C.2 Capacity development Identify essential skills required by staff and major user groups in order to access and make good use of the relevant ICT based services. Considering what you know (and can find out) about the existing capabilities and existing training facilities, make a proposal for how these skills should be developed and discuss it with your tutor. C.3 Community needs assessment Find out the current and future anticipated needs for information and ICT services, including the willingness and capability to finance ICT activities and innovations. Which information is currently used? At which costs? Is there demand for more or different information? Who needs information? Which information is needed? Where, when and what for is this information needed? Who can provide this information and how? How is access to this information organized / practiced at present? What shall be changed / achieved? How will women benefit from ICT access (gender aspects)? Identify potential local user groups in rural areas and write down the questions you would ask representatives of these groups (by questionnaire or in focus group meetings). Discuss your proposed questions with your tutor. He will then give you a questionnaire and the results of a needs survey carried out in Indonesia. See what conclusions you can draw about the needs for ICT from this survey and discuss it s applicability and relevance. C.4 Potential Benefits of access to ICT in rural areas Identify potential benefits of access to ICT by rural population and try to find measurable indicators of that these benefits are actually there of their (monetary) value, when possible. Also, identify other potential users of telecenters and how they could benefit. Write a summary and discuss it with your tutor. C. 5. Connectivity You are now looking at one of the sites proposed above Salatiga - and you have found out that the best option for telecenter connectivity is to use the ISP operator s WAN (Indonet - see Summary description of ICT environment in Indonesia ). C.6. Services to be provided Based upon the results of the needs analysis, propose a list of services to be provided by the telecenter and discuss this with your tutor. C.7 Telecenter equipment Make a list of the equipment required to provide the envisaged services and see your tutor who will give you a list of prices to use in your financial analysis (are these prices
realistic today in your experience check also on the Internet), C.8 Who would provide and receive and access information? Need for intermediaries? Role of community radio? How to promote gender equality. Who would provide locally relevant information? Does this information exist and only need to be made available, or would telecenters need to create it? Identify socio-cultural aspects to be considered in telecenter design. C.9 Ownership, management and staffing Should the telecenters be established and managed as a public or private sector initiative? Discuss pro s and con s. How many staff would be needed and what would they cost? How to guarantee non-selective universal access for the rural public, flexible response to changing needs of the beneficiary communities, and the maintenance of the technical equipment provided? How to avoid competition between the project's telecenters and private sector initiatives? Discuss different business models with your tutor (individual MCTs run by community or private operator, franchise business). In the continuation you will assume that the project in Salatiga will be organized as a Franchise business with one main MCT (the Franciser) and a number of Satellite MCTs (Franchisees) growing from 5 initially to 10 the 2 rd year. Look up all information you can find about the partners proposed in Section B above and imagine how they could participate and contribute to the success of the project. C.10. Business plan and Financing List the content of the business plan and discuss your list with your tutor. Use the assumptions about price of equipment, staff, transport, maintenance, etc. and communication costs, given to you by your tutor to calculate investment capital needed and annual operational costs the Main MCT and a Satellite MCT (use Excel). Are equipment prices given to you (used in 2003) applicable today in your country? Develop a tariff strategy (some services may need to be offered free initially as part of the marketing costs). Make assumptions about pricing of services. Can prices be made affordable to the majority of the rural population and, if so, how (cross-subsidies, charges for services provided to government or private enterprise)? Make assumption about the use of the services the first 3 years of operation and discuss your assumptions with your tutor who will give you the assumptions used in the real case. Set up an Excel sheet for calculation of the cash flow and use the assumptions given by your tutor to calculate the cash flow for the first 3 years for the main telecenter and for one Satellite MCT (franchisee)
Identify possible sources of finance. Would the private sector need financial incentives to provide services to sparsely populated areas? What is the appropriate mix of public and private resources for viable business plans for telecenters? What is the current and possible future role of NGOs in ICT support and development in the selected sites? Discuss the sustainability of the project.
C. 11 Monitoring and Evaluation (M&E) Which structural / organizational elements need to be in place to allow a direct and constructive dialogue between the beneficiary communities and service providers, in order to guarantee a flexible reaction to a changing demand in the communities? Prepare a list of indicators for measuring telecenter success. The M&E framework should capture the impact on both IT utilization and socio-economic development (such as skills development, income opportunities and income increases, gender equity, community empowerment, availability of locally demanded information). Suggested readings and some useful websites (there are many more): The paper: Summary of the ICT environment in Indonesia, http://www.itu.int/itu-d/ict/cs/indonesia/material/idn%20cs.pdf, http://devdata.worldbank.org/ict/idn_ict.pdf www.unesco.org and http://www.uis.unesco.org/profiles/en/gen/countryprofile_en.aspx?code=3600 http://us.oneworld.net/guides/indonesia/development http://english.people.com.cn/200604/18/eng20060418_259320.html Excerpts from he Palestina MCT projektet (will be made available) Good Luck!