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PT INTI to use 'sixth wave of innovation' to develop new business areas

Interview - December 20, 2013
Tikno Sutisna, President Director of PT Industri Telekomunikasi Indonesia (Persero), discusses the company’s approach of using the latest technology to develop and enhance telecommunication and radar systems, and create smart solutions for clients, particularly in the defense industry
United World: How did PT INTI evolve from a purely manufacturing based company into an industry focused on systems solutions and technological integration?

PT Industri Telekomunikasi Indonesia (Persero), also known as INTI, was founded in 1966. This was a result of cooperation between Perusahaan Negara (PN) Telecommunications and Siemens AG. In 1968, this partnership led to the establishment of PTT (Factory Telephone & Telegraph), an organization that was then part of LPP Postel (Post and Telecommunication Research & Development). In 1974, this part of LPP Postel was separated from this organization and made into a limited liability company under the auspices of the Directorate General of Post & Telecommunication – INTI.

By the early 1970s INTI was known as a telephone and radio transmitter assembly manufacturer. We developed our capacity as a producer of digital central telephone technology (STDI-INTI) in the early 1980’s. Through STDI and STDI-K, INTI successfully digitalized all telecommunication systems in Indonesia. The wider public became familiar with INTI because we produced almost 80% of telephone handsets made in Indonesia.

The 1990s saw INTI achieve excellence in construction, engineering, research and development, as well as becoming the prime mover in developing both fixed and mobile telecommunication networks. We installed 60% of the domestic network system, which accounts for more than 5 million fixed line connections, 2,500 base transceiver stations (BTS) and a mobile service switching center (MSC) serving 4 million mobile connections.

In the year 2000, INTI began building its IT capacity with the Infocom System & Technology Integrator (ISTI). We focused on developing our capability in installation, test and commissioning, integration, and after sales services.

Now in 2014 our priority is to expand our capabilities in order to better meet customer expectations and prepare the company for the future. We have also established a roadmap to enter the business of engineering solutions, expanding our portfolio beyond system integration. We also focus on genuine products and manufacturing, mobile applications, content, maintenance, managed services, and IT services.

Furthermore, we are currently working on two projects that represent the beginning of the company’s provision of SMART solutions to our customers. The first one is the Trade-In Trade-Off (TITO) project, a strategic endeavor in fiber optic deployment for PT Telkom. The second project is an important oil monitoring system for PT Pertamina.

United World: In order to remain competitive, technology-based companies constantly strive to stay ahead of the curve with innovative products. What is your strategy to keep up to date with technology trends and create value for smart customers?

Since the establishment of INTI as a state-owned company in 1974, we have focused on our core telecommunications and IT business, and since this time we continued to develop the telecommunications industry through cooperation with various technology owners in order to facilitate technology transfer.

Not surprisingly, since partnering with Siemens AG and other international companies in 1966 (INTI was then a member of PN Telekomunikasi with Telkom) it went on to become the premier Indonesian phone manufacturer using the most advanced technology at the time.

But as we know, technology is constantly evolving and INTI could not stand still with the same portfolio we used four decades ago. We had to evolve and expand our operations in order to be able to compete successfully with other players in the industry. In addition to maintaining the existing revenue stream from Telkom, INTI is striving to increase its client portfolio by taking advantage of other opportunities in different lines of business, such as: TITO and FTTH, smart fuel, system integration, maintenance & managed services, smart services, mobile services, mobile devices & content, smart devices, and INTI's smart solutions.

As we are striving to expand our business and achieve our goals in terms of diversifying our business portfolio, we want to maintain our existing market and products which continue to ensure growth and high profitability for INTI. This includes our business in the telecommunications market and cellular operators sectors, as well as the defense and energy sector, with the latter including providing monitoring and control systems for fuel sales.

Another initiative in our business strategy is to significantly grow new business areas such as smart solutions. In fact, we have already applied smart solutions in one integrated concept. This concept describes everything from the 6th Wave of Innovation school of thought, which puts forward that the next innovations will focus on resource efficiency. The 6th Wave highlights this through such catch phrases as: ‘waste is opportunity’, ‘bit is global and atom is local’, ‘selling services not products’, and ‘if we can’t find the answer, back to the nature’.

This philosophy pushes people to develop solutions in smart ways to accommodate client needs, created as a result of resource scarcity. INTI considers this situation as an opportunity to augment its products portfolio with smart solutions in several sectors including health, energy, defense, government, and retail business.

United World: Following Indonesia’s exponential economic growth over the past years, the government is pushing for the revival of the national defense industry to ensure the sovereignty of the country. How can INTI contribute to the development of defense oriented electronic products?

INTI contributes to the development of the defense industry in accordance with our capability and expertise in telecommunications and information technology.

We have been taking part in the modernization of the communication capabilities of our country’s military, Tentara Nasional Indonesia (TNI), especially in the design and installation of microwave devices to support the communication of data, voice, and video that connects TNI headquarters with units in the field.

INTI has taken an important role in the development of a high frequency (HF) communication system used by the Rapid Reaction Strike Force (PPRC). Furthermore, we have been working with Coastal Surveillance to develop products for the purposes of monitoring ship traffic and maritime surveillance operations that are useful to support the Navy.

INTI has also been working closely with the Research and Development Department of the Navy, where we have successfully developed an anti-bomb device, the Improvised Explosive Device (IED) jammer. Additionally, we take an active role in the preparation of the Roadmap for the National Defense Industry and Ministry of Defense programs. This is especially the case for non-combat equipment in the field of Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR).

Based on our capabilities and competencies, our objective is to become one of the leading integrators for radar products in the defense industry. In addition to the above, INTI is also ready to work together with other national defense companies, especially manufacturers of defense equipment with land, sea, and air dimensions.

We combined our capability and competence in research with the Indonesian Institute of Sciences (LIPI) to produce an advanced technology-based product made in Indonesia, namely the Indonesia Surveillance Radar (ISRA). This product has a number of technological advantages compared to similar systems. ISRA uses the latest radar technology (FM-CW) with software that can be reconfigured, meaning that the technology applied to this product is versatile can be re-developed as needed. In fact, ISRA is not easy to spot by any other active radar located within a one kilometer radius.

Beside our cooperation with LIPI, in order to contribute further to the local defense industry, we are collaborating with several international research institutions to develop a ground control intercept radar with a program of technology transfer radar, and a progressive manufacturing plan. 

The government recently announced plans to merge PT LEN and PT INTI, the two main state-owned electronics manufacturers. What progress has been made on this?

Special consultants have carried out studies regarding the merger of state-owned enterprises (SOEs) and we are now waiting for the next steps to be taken. We are still waiting for the best decision to be made and hope it will provide the basis for the best shareholder's actions.

In accordance with government regulation No. 43/2005 on the merger, amalgamation, and takeover of SOEs, certain goals have to be reached. First of all, the plan must increase the efficiency, transparency and professionalism of the SOE. Secondly, it must increase the performance of the SOE. Thirdly, it has to provide financial benefits to the state in the form of dividend and taxes. Finally, the merged corporation must be able to produce quality products and services at competitive prices.

With over 700 employees, what is PT INTI’s commitment to improving human capital and demonstrating corporate social responsibility?

Currently, we have 726 employees at INTI, without counting the people that we subcontract and outsource for different projects. In terms of the education level of our staff, we have 336 high school graduates, 53 diploma holders, 289 university graduates and 35 masters degree holders.

As part of our commitment to the capacity and mind building of our human capital, we have established the INTI Academy. This program is aimed at reinforcing basic corporate culture and supporting the company's performance. Additionally, we organize monthly seminars conducted by professional lecturers. Furthermore, we have a compulsory 8 hours of employee training per year, as well as job specific training specifically adapted to each business division.

In terms of corporate social responsibility, INTI has created a special program (Kemitraan dan Bina Lingkungan) for which we allocated a budget of Rp 150m or 0.92% of the company’s profit in 2012. We focus our program mainly on areas related to education, health, training, environment and public welfare.

What are the main benefits you draw from your strategic partnerships with US based companies and their expertise in the field of the new technologies development?

We cooperate with several US based companies, such as Northrop Grunman (on radar cooperation) and Harris (on communication systems). Our strategic partners from the US are supporting us with knowledge transfer in the field of new technologies development. Under their supervision we have been able to develop new subsystems.

Furthermore, we can draw from US expertise in military technologies in order to contribute to the national defense industry in accordance with our competencies and capabilities. For example, we are working together with LIPI to develop radar surveillance system (ISRA) to help monitoring the national coastal areas.