The Mobile Man

Andy Zain is a firm believer in the power of mobile technology.

Photo by Will WiriawanFlash back to 1998, direct your browser to mobile.nokia.com, and you’ll find that the webpage was served from a humble house in Kelapa Gading, North Jakarta. At the helm was Andy Zain, who has been in the mobile sector of the ICT industry from the outset, a factor he calls “very fortunate”. He began his career at a firm operating an Internet service provider in 1994, which also became a distributor for Nokia data products.

“That’s how my love affair with the mobile Internet started,” he says. “I was involved in building some of the first mobile services, such as SMS push delivery, ringtone distribution, as well as deploying the first mobile banking solution in Indonesia – which was done between 1997 and 2001.”

With a partner, in 2003 he started Elasitas, at a time when mobile portal development was still a limited skill. The firm was contracted by Nokia to do a case study on mobile browsing.

“Nokia was impressed with our work and commissioned us to develop Nokia’s first mobile portal, which was later deployed to 35 other countries across the globe,” Andy, 38, says.

It started the ball rolling. Telkomsel, Indosat, XL, StarOne and later Flexi commissioned them to create portals, which became a platform to launch various media services and ushered in the era of wallpapers, ringtones, games and other content download services.

“From then on we also partnered with many international brands, such as Disney, Yahoo! Mobile, EA Mobile, Gameloft and Cartoon Network, to bring their products to Indonesia,” he adds.

Andy left Elasitas last year to set up Numedia, part of PT SkyBee Tbk, one of the country’s first mobile content providers and one that he says will allow him to expand the scope of his business.

“Everyone has been talking about the massive growth of the digital sector, yet there’s very little effort to get us ready for that, regardless of how big our potential market is. With SkyBee, we hope to take active roles in shaping the new media industry,” he says.

“Apart from mig33, now one of the largest mobile communities in Indonesia with more than 28.5 million users, we recently teamed up with VuClip, a US-based mobile video distribution company, to bring mobile video viewing to cell phone users in Indonesia. Other projects include a mobile search engine, mobile advertising and other solutions.”

Here he discusses efforts to get mobile services moving.

There’s a big wave coming to the digital business in Indonesia, yet the infrastructure is not yet there.

Even though development of physical infrastructure is slow, Indonesia is among the first countries in the world to widely adopt the high-speed 3G mobile network. Thus, the main problem in our country lies in soft infrastructure: innovation. Most mobile services we enjoy here are based on an aging technology; services like content delivery and mobile banking are still delivered via Short Message Services (SMS), a 12-year-old mechanism.

Take the ringback tone for example. It was created eight years ago and has seen little change since. Those two account for most of the Rp 8 trillion mobile commerce annually. Though digital advertising is growing, it is still far from reaching its full potential. Another problem is the lack of high-quality content; it takes great resources to create quality stuff but we simply are not investing enough to make it grow. If we step out to innovate and take risks, and a sufficient number of people participate, I believe we can solve this problem sooner.

Indonesia is one of the pioneers in widespread mobile usage, but mobile commerce has barely taken off.

Indonesia, with its population of 250 million, has one of the highest levels of mobile penetration, and we now have more than 180 million cell phone users in the country. As one of the world’s largest and fastest-growing mobile markets, it’s easy for us to accentuate [this fact] over the Japanese or European markets. But unlike those developed countries, most of our mobile users don’t have debit/credit cards – sometimes not even bank accounts. It would be a mistake to compare our market to a country where most – if not all – of the mobile users have one or more credit cards.

Payment problems don’t exist in a country with such a high credit card or banking penetration. That is not the case for Indonesia; our bank account holders are only a small fraction of the population and credit card penetration is still at the single digit percentage. On top of that, most mobile devices sold here are not smartphones but low-end ones, which further complicates business transactions due to the limited capability. So people still prefer cash.

But things are changing. We can learn from Africa, India or Bangladesh, which recently launched simple mobile technology in the form of micro-financing and money remittances to accelerate economic development in rural areas. I personally think that this should be the way to go for Indonesia, and I am happy to learn that Telkom recently launched DELIMA (Delivery Money Access) which provides such a service.

The mobile sector’s growth can be attributed to the aggressive push by mobile carrier companies, but besides spectrum allocation, the Indonesian government has done little to facilitate that growth. What else can our government do to take the mobile industry to the next level?

The government should understand that the telecommunications sector consists of network providers (carriers) and content providers (content). Network providers are big enterprises with enough resources to lay down the infrastructure that content providers utilize. They mostly are small and medium enterprises (SMEs), which rely on creativity to create unique and innovative products, so it’s a two-sided story.

Aside from that, content providers are the small fish in the big ocean. They are fragile because of the borderless nature of the digital market, and they must compete not only locally but also globally with mostly government-backed international giants from Southeast Asia, US, Korea, Japan, etc.

Therefore, our government must take the initiative to help local companies to succeed at their own game; incentives need to be allocated, regulations must be relaxed to support innovation and growth. Poorly implemented policies restrict that, and worse, will result in a widespread brain-drain of our talents, leaving them no choice but to escape to neighboring nations. We don’t want Indonesia to be just a big ocean of consumers for global businesses without domestic producers, do we?

Startups are a hot topic in Indonesia right now, but most are web-centric because of the lack of credible support in the payment area. How can a mobile-centric business like yours thrive?

Again, most startups are web-centric because most have chosen to stay in their comfort zone. Anyone who has done proper research will know that mobile has 10 times more potential than the web in Indonesia; there are at least 50 million cell phones sold every year compared with just five million PC and laptops combined, and most cell phones sold today are Internet capable. So any startup aiming for a larger market must have mobile on their agenda.

With a sound mobile strategy in place, you need to be able to monetize it; whether you like it or not, carrier billing – which is using your mobile credit as a payment option – must be on the table for discussion as they [carriers] have the infrastructure and the credibility to process your transactions. At the same time, we also need to experiment with other ways to conduct digital transactions. Mig33, for example, has been successful in setting up a merchant-based distribution network, which bypasses the hefty commissions that mobile operators require without having to push our users to acquire bank accounts or credit cards.

You began humbly in a three-person homegrown company. What has the growth taught you and what is your advice for aspiring entrepreneurs?

Never stop learning, especially if you are in the IT sector. Be kind to your peers and learn from them. Being an entrepreneur means taking risks and getting out of your comfort zone. It’s always nice to have a friend next to you when exploring new and uncharted areas. + Will Wiriawan

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