Best Procurement Practice - Indonesia

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Best Procurement and Maintenance Practice:

GSMA Green Power for Mobile Indonesia

Indonesia
December 2013
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Contents
Executive Summary ........................................................................................................... 5

Introduction ........................................................................................................................ 6
1. Green Procurement Guide ........................................................................................ 6
1.1 Sustainable Procurement Process ......................................................................... 6
1.2 Different Procurement Models ............................................................................... 7
1.3 CAPEX Model ........................................................................................................ 8
1.3.1 Process Flow: CAPEX Model ......................................................................................... 8
1.3.1.1 Planning .................................................................................................. 8
1.3.1.2 RFP Circulation..................................................................................... 11
1.3.1.3 Evaluation and Vendor Selection .......................................................... 11
1.3.1.4 Contract ................................................................................................ 12
1.3.1.5 Implementation ..................................................................................... 12
1.4 OPEX Model ........................................................................................................ 13
1.4.1 Process Flow: OPEX Model ......................................................................................... 13
1.4.2 Energy Outsourcing Models ......................................................................................... 14
1.4.2.1 Monthly Flat Fee Model ........................................................................ 14
1.4.2.2 Power Purchase Agreement (PPA) Model ............................................ 15
1.4.2.3 Energy Saving Agreement (ESA) Model ............................................... 16
2. Operations and Maintenance Guide....................................................................... 17
2.1 Monitoring ............................................................................................................ 18
2.2 Maintenance ........................................................................................................ 18
2.2.1 Preventive Maintenance ............................................................................................... 18
2.2.2 Predictive Maintenance ................................................................................................ 19
2.2.3 Corrective Maintenance ............................................................................................... 19
2.3 Managing Performance ........................................................................................ 19

2.4 Audit ..................................................................................................................... 20
2.5 Improvement ........................................................................................................ 20
3. Conclusion ............................................................................................................... 21
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Glossary
MNO : Mobile Network Operator

CAPEX : Capital Expenditure
OPEX : Operational Expenditure
eTOM : Enhanced Telecom Operations Map
ESCO : Energy Service Company
GPM : Green Power for Mobile
SLA : Service Level Agreement
ROI : Return on Investment
RFP : Request for Proposal
DG : Diesel Generator
KVA : Kilo Volt Ampere
kW : Kilo Watt
L : Litre
PV : Photovoltaics
Ah : Ampere Hour
IRR : Internal Rate of Return
NPV : Net Present Value
SoW : Scope of Work
PPA : Power Purchase Agreement
ESA : Energy Saving Agreement
O&M : Operations and Maintenance
NOC : Network Operations Centre
TT : Trouble Ticketing
KPI : Key Performance Indicator
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Figures:
Figure 1 Procurement Process

Figure 2 Process Flow: CAPEX Model
Figure 3 Homer Design Model
Figure 4 Investment Schedule: CAPEX Model
Figure 5 Cash Flow Comparison: CAPEX Model
Figure 6 Project Management Stage
Figure 7 Process Flow: OPEX Model
Figure 8 Cumulative Savings for MNO/TowerCo from Flat Fee Model
Figure 9 Cumulative Savings for MNO/TowerCo from PPA Model
Figure 10 eTOM Framework
Figure 11 Operations and Maintenance Process
Figure 12 Continuous Improvement Plan
Tables:
Table 1 CAPEX vs OPEX Ownership
Table 2 Financial Summary: CAPEX Model
Table 3 Sample of Responsibility Matrix
Table 4 Key Elements for OPEX Model
Table 5 Cash Flow: Monthly Flat Fee Model
Table 6 Cash Flow: PPA
Table 7 Sample of KPI
Table 8 Sample of SLA
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Executive Summary
By Q2 2013, the number of unique subscribers in Indonesia had reached 93.4 million1,
putting pressure on Mobile Network Operators (MNOs) to expand and upgrade their
network capacity to accommodate the traffic. The required network expansion has brought
multiple challenges such as obtaining land permits, acquisition and community issues as
well as grid availability in particular locations.
To solve the issue of grid availability, MNOs need to find alternative energy solutions to
power their base stations and green technologies can provide that solution. To date, MNOs
have optimized their power configuration through energy efficiency activities to reduce their
expenditure in off-grid and unreliable grid locations by using DG battery hybrid solutions.
The DG battery hybrid solution is the preferred, and the fastest, solution to make cost
savings. However, implementing green solutions can potentially generate more savings
then the DG battery hybrid solution.
This document is a best practice guide for the Indonesian market, providing guidance on
choosing and procuring green solutions as well as on operations and maintenance of green
sites. The document also presents multiple CAPEX and OPEX business models with some
explanations on the process flows and snap shots of the business cases for readers to
understand the basic concept of green procurement.
With regards to issues of maintenance, the document will present some best practices
seen in Indonesia, in line with the Enhanced Telecom Operations Map (eTOM) framework.
It will give the reader an understanding of the scope and responsibilities maintenance
entails. This document will serve as a guideline for MNOs, Vendors or Energy Service
Companies (ESCOs) to choose suitable renewable energy business models, based on
Green Power for Mobile’s (GPM) latest research and analysis.
1 Wireless Intelligence
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Introduction
Indonesia is an archipelago country with more than 17,000 islands across the country. The
electrification rate in the country varies from one island to the others, Java Island has the
country’s highest electrification rate, with above 90% electrification rate, while Papua Island
has the worst, with 50%. This variety within Indonesia requires MNOs to adapt their
strategy from one region to another.
By 2012, Indonesia had more than 90,000 telecom sites installed, with 5% of them located
in off-grid locations. The number of sites will increase with time, as MNOs expand their
networks to rural and remote areas and the incremental increase of diesel price will add
another pressure on daily operation costs for MNOs.
GSMA has recorded that about 4,590 green sites have been deployed across the country.
Solar has become a preferred renewable energy source, followed by fuel cell. GSMA has
estimated that future investment in green solutions for off grid and unreliable grid sites
could reach USD 151.5 million by 20152. To tackle the CAPEX issue, MNOs could choose
an OPEX based model to deploy the green technology solution in their network. MNOs
would shift the responsibilities of commercial and daily operational activities to ESCOs in
exchange for a recurring fee.
1. Green Procurement Guide
Procurement is an acquisition of goods or services from an external source. A sustainable

procurement or green procurement is an acquisition taking into consideration the
environmental, social and economic impacts. The principle of sustainable procurement
aims at finding the most adequate green energy vendor/ESCO solution based on technical
and financial requirements taking into account those three aspects.
Regarding technical requirements, some key elements to consider on selecting a

vendor/ESCO can focus on following areas:
 Technical solutions for green technology

 Energy efficiency
 Content of hazardous substances from the solution
 Maintenance capability
 Service Level Agreement (SLA)
 Disposal process from the solution
And financial requirements consist of:
 Vendor/ESCO financial capability to support the project
 OPEX saving target by implementing the solution
 Return on Investment (ROI)
 Net Present Value for each capital that company spent for the solution in future
1.1 Sustainable Procurement Process
A basic sustainable process will not be so different from a traditional procurement process.
The difference is only on environment and social consideration while procuring the solution.
The below figure illustrates the procurement process flow activities.
2 GPM Market Analysis

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Figure 1 Procurement Process
RFP Vendor
Planning Evaluation Contract
Circulation Selection
 1st step – Planning. The planning includes the gathering of information on the user’s
demands and identifying the needs and requirements to acquire goods or services.
 2nd step - Request for Proposal (RFP). This activity will begin after receiving an order
request from the user. The RFP itself consists of technical requirements, warranty terms
and post warranty support from vendor/supplier.
 3rd step - Evaluation, this step will analyse each incoming proposal from
vendors/ESCOs and build a comparison among the proposals.
 4th step - Awarding the tender. After filtering and analysing each proposal, the
procurement team needs to work together with the procurement committee to award the
winner from the bidding. The procurement committee members can come from
technical, finance, HR and legal teams.
 5th step - Contract. This is the final stage of the procurement process. The contract will
be given to the party that complies the most with the RFP requirements.
1.2 Different Procurement Models
In procuring green solutions, the MNO can choose two different business models based on
a financing scheme. These two business models have been recognized in the telecom
market as the in-house /CAPEX model and the outsourcing / OPEX model.
The in-house or CAPEX model requires a large investment from the MNO to acquire a
green solution but will provide significant OPEX savings. On the other hand, Returns on
Investment (ROI) will be one of the main points to consider before choosing the solution to
secure the investment.
In the outsourcing or OPEX model, the MNO will shift the responsibility of investment and
maintenance to an ESCO. The ESCO will bear the cost of acquiring the assets and in
return the ESCO will receive a fee based on the services. The ESCO provides a Service
Level Agreement (SLA) to the MNO to measure its services.
Table below shows the ownership of each activity in both the CAPEX and OPEX business
models.
Table 1 CAPEX vs OPEX Ownership
Activity CAPEX Model OPEX Model

RFP preparation MNO MNO
Technical design MNO ESCO
Project management MNO ESCO
Procuring equipment MNO ESCO
Operation and maintenance MNO ESCO
Risk management MNO ESCO
Site monitoring MNO ESCO
Site security MNO ESCO
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Fueling and DG maintenance MNO ESCO
1.3 CAPEX Model
The CAPEX model is the most recognised option for procuring green solutions in
Indonesia. MNOs and Tower Companies have flexibility on how to design and deploy green
solutions, considering the OPEX saving targets they want to achieve.
1.3.1 Process Flow: CAPEX Model
The CAPEX model process flow is described below:
Figure 2 Process Flow: CAPEX Model
Process MNO/TowerCo Vendor
Planning
Site Survey and
Technical Dimensioning
RFP Circulation
Prepare the RFP for Receive RFP
Circulation
Detailed Technical
Survey
RFP Submission
Evaluation
Vendor Filtering Based
on RFP
Vendor Selection
Vendor Selection for
Equipment Supply
Contract
Agreement and Contract
Implementation
Implementation
1.3.1.1 Planning
Before deciding to purchase a green solution, the MNO/TowerCo’s needs and

requirements should be defined in the RFP. Site survey and technical dimensioning are the
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key points to build the RFP. A site survey will give the current status on the targeted sites
for dimensioning a solution.
During the site survey, the MNO/TowerCo needs to consider the following aspects to assist
realistic design and goals for green RFP preparation.
 Site power characteristics and possibility to optimize the site load

 Site layout and environment surrounding the site
 Site security and community situation on target site
 Analyse the sites for grid extension possibility and the costs associated
 Business case development and target OPEX saving that need to be achieved for
each site
 Green site dimensioning and equipment to consider
And here is the sample of a CAPEX model design, with a business case development.
Sample CAPEX Model
An existing site, with a power configuration as follows:
 1 kW off-grid site load

 The site has 10 KVA DG with 16 hours running a day
Assuming,
 Diesel price is around USD 1.2/L (including transportation)

 10 KVA fuel consumption: 2 L/hr
 PV Solar cost: USD 300 for 250W panel
Based all those assumed values, the HOMER design will look like as follow:
Figure 3 Homer Design Model
As a result, HOMER provides the optimal green energy solution based on entries above.
The HOMER suggests using a 5 kW solar solution with 8 rectifiers and 600 Ah batteries.
CAPEX and OPEX Estimation
Apart from technical results, the HOMER software also produces a financial report. Below
is the investment schedule for the CAPEX model.
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Figure 4 Investment Schedule: CAPEX Model
$35,000
$30,000
$25,000
$20,000
OPEX
$15,000 CAPEX
$10,000
$5,000
$0
Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Figure 5 Cash Flow Comparison: CAPEX Model
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$-
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
OPEX Diesel OPEX Green Solution Saving
Note: OPEX Green Solution includes load schedule payment
The CAPEX model cash flow shows the potential saving year-on-year against diesel based
power solution. The increase in the OPEX of the green solution in year 6 is due to battery
replacement. The financial summary is presented below.
Table 2 Financial Summary: CAPEX Model
PayBack (Year) 1.58

ROI 63.2%
IRR 63.40%
NPV $68,077
Discount Rate 12%
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1.3.1.2 RFP Circulation
Once the site survey and technical dimensioning has been done, the MNO/TowerCo can
prepare technical specifications and requirements to a vendor. The request should be
included in the RFP document. The RFP should cover the following areas:
 The Scope of Work (SoW) and procurement’s timeline

 The technical requirement without giving any specific brand
 A clear responsibility matrix between each parties
Table 3 Sample of Responsibility Matrix
No Activity Purchaser Supplier

1 RFP Distribution R
2 Technical Site Survey S R
3 RFP Submission R
4 Supplier Selection R
5 Contract Finalization R S
6 Release Purchase Order R S
7 Installation S R
8 Test and Commissioning S R
9 Acceptance Test A R
10 Final Acceptance Certificate A R
Note: R: Responsible, S: Support and A: Approval
 A project schedule
 A compliance table including technical, legal and administrative compliance for
vendors to confirm their capabilities
The RFP needs to be distributed to all vendors at the same time.
On the vendor’s side, a few activities need to be prepared before responding to the RFP,
such as:
 The detailed technical site survey: this site survey is a must-do activity before
completing the RFP. With a technical site survey, the vendor will have an
understanding of the target site for design, geographical situation and possibility to
extend the grid. The survey needs to observe security situation surround the location
 The RFP submission will be completed after the detailed technical survey is done.
The RFP response will be based on the vendor’s technical capabilities and the site
survey.
1.3.1.3 Evaluation and Vendor Selection
The final step of the procurement is awarding a winner. Once all RFPs are received from
the vendors, it is time to filter and clarify. The filtering can be based on compliance tables
for each particular category and the clarification should consider the following elements:
 Technical aspects: the durability is a main concern to be considered. The solution

must be flexible for site load expansion and easy to maintain. The lead-time on
implementation of the solution will need to be considered, including how spare part
availability in or out of the country will be handled.
 Financial aspects: Capital availability is a key point to consider when choosing a
vendor for the CAPEX model. An alternative to consider is an OPEX based model.
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Some of the key elements to consider of an OPEX solution are: maintenance costs
term of payment and performance bond for the solution provider.
 Post-project support: post-project support includes the customer service, warranty

terms and technical support from the vendors.
1.3.1.4 Contract
Once the vendor has been chosen, the process goes into the legal aspects of the contract.
The contract has to cover the following elements:
 A detailed description of the scope of work
 A specific price and payment arrangement

 A clear mention of mutual obligation
 A project schedule with dates and deadlines
 A penalty clause if one of both parties cannot fulfil the contract requirements
 Force majeure term
1.3.1.5 Implementation
The implementation is one of the steps of the project management process. The figure
below shows a standard project management process:
Figure 6 Project Management Stages
Initiation
Planning and
Design
Implementation Monitoring and Closing

Controlling
 Initiation or project kick-off, it is the process where both parties will agree on a
project’s timeline and deadline
 Planning and design, in this process the vendor will follow on approved design to be
implemented during the project
 Implementation is the main activity for the execution of the project
 Monitoring and controlling, a regular meeting and site visit have to be conducted to
track the progress
 Project closing
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1.4 OPEX Model
The OPEX model or outsourcing model is another option for purchasing green solutions.
By implementing the OPEX model, the cost of implementation and maintenance will be
shifted from the MNO/TowerCo to the ESCO. The ESCO will do the end-to-end activity to
provide a green solution for the MNO/TowerCo.
1.4.1 Process Flow: OPEX Model
Below is the procurement process flow for the OPEX model
Figure 7 Process Flow: OPEX Model
Process MNO/TowerCo ESCO
Planning
Site Request
Select an OPEX Model

for RFP
RFP Circulation
Prepare the RFP for Respond to RFP
Circulation
RFP Submission
Evaluation
ESCO Filtering Based
on RFP
ESCO Selection
ESCO Partner Selection
Contract
Agreement and Contract
Implementation
Implementation
The procurement process flow is very different from the CAPEX model but some key
elements need to be highlighted on OPEX model:
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Table 4 Key Elements for OPEX Model
Process MNO/TowerCo ESCO
Planning - The MNO/TowerCO needs to

pick an outsourcing model
before releasing the RFP
- Clustering site locations for
maintenance
- Long term engagement target
for OPEX model
RFP Circulation - Define clear scope of work - The ESCO needs to have
inside the RFP operational experience to
- Define an outsourcing model handle the maintenance
and an expected price per - Hands on power
kWh management and site
maintenance
- The ESCO needs to have
good human resources to
support the project
ESCO Selection - Choose the ESCO who has

the strongest financial support
Proven in field maintenance
- Choose ESCO that can give
competitive price per kWh
Contract - Create KPI and SLA for ESCO - Set minimum usage for
- Suitable contact tenure PPA model
- Set penalty clause for any - Clear define commercial
violence on KPI/SLA and operational terms in
the contract
1.4.2 Energy Outsourcing Models
There are multiple types of energy outsourcing models, but here are three main ones used
in the telecom industry:
 Monthly Flat Fee model

 Power Purchase Agreement (PPA) model
 Energy Saving Agreement (ESA) model
1.4.2.1 Monthly Flat Fee Model
The monthly flat fee model implies that the ESCO will install a green solution and provide
power to the site. The MNO/TowerCo will pay a monthly fixed price to the ESCO. The
ESCO’s responsibility is not only to provide and power up the site, but also to maintain the
power equipment and to ensure an agreed SLA will be met.
One of the challenges with this model is the diesel price fluctuation, because it will impact
the Return on Investment (ROI) calculation and daily operational cost. The monthly flat fee
model itself is a commitment-based agreement between the ESCO and the MNO/TowerCo.
The MNO/TowerCo will give the load-window commitment to the ESCO and the ESCO will
charge it on a monthly basis.
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In the outsourcing model, the ESCO will define a maximum load for the MNO/TowerCo and
any consumption that exceeds the load-window will be charged separately. In this case, the
ESCO needs to install a power monitoring system to ensure all those commitments and at
the same time monitor the power equipment in real time.
Here is an example of a Flat Fee Model cash flow based on the green design of 1 kW off-
grid site from the CAPEX model illustration above. The solar green solution costs USD
29,600.
Table 5 Cash Flow: Monthly Flat Fee Model
Y0 Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
MNO Cash Flow $9,974 $9,974 $9,974 $9,974 $9,974 $9,974 $9,974 $9,974 $9,974 $9,974
ESCO Cash Flow -$8,880 -$6,642 -$6,701 -$6,762 -$6,827 -$6,895 -$6,966 -$7,041 -$7,120 -$7,203 -$7,290
ESCO Gross Profit -$8,880 $3,332 $3,273 $3,211 $3,147 $3,079 $3,007 $2,932 $2,854 $2,771 $2,684
Note: Y0 is the ESCO investment 30% of total solar solution
The ESCO’s ROI can be achieved in 2.5 years with an implied margin of 15%. The flat fee
cost for the MNO is USD 831/ month. The cumulative savings for the MNO adopting this
model compared with diesel scenario, is shown below:
Figure 8 Cumulative Savings for the MNO/TowerCo with a Flat Fee Model
Cumulative Savings for the MNO/TowerCo

$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
1.4.2.2 Power Purchase Agreement (PPA) Model
The PPA model is the outsourcing model in which the MNO/TowerCo needs to pay on a
usage basis. This model gives the flexibility for the MNO/TowerCo to expand its network,
but it will be difficult for the ESCO to cater to their demand without proper planning and
design.
The challenge of this model is to identify a fix rate per kWh over a 10 year-business plan.
Note that the rate of the PPA may not be as competitive as a commercial power.
For example, for the PPA model with a 1 kWh site load requirement and a 10% buffer, the
system cost is of about USD 29,600.
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Table 6 Cash Flow: PPA
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
Power Requirement 9,636 9,636 9,636 9,636 9,636 9,636 9,636 9,636 9,636 9,636
MNO Cash Flow $10,118 $10,118 $10,118 $10,118 $10,118 $10,118 $10,118 $10,118 $10,118 $10,118
The calculation considers CAPEX and OPEX investments. The cumulative savings for the
MNO/TowerCo is described below.
Figure 9 Cumulative Savings for the MNO/TowerCo from PPA Model
Cumulative Savings for the MNO/TowerCo

$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$-
Y1 Y2 Y3 Y4 Y5 Y6 Y7 Y8 Y9 Y10
The detailed financial summary for the ESCO is as follows:
Payback to ESCO (Year) 2.51

IRR 25.55%
NPV $ 13,530
Discount Rate 12%
1.4.2.3 Energy Saving Agreement (ESA) Model
The ESA model will require more efforts to implement, as the MNO/TowerCo and ESCO
partner need to record the current OPEX consumption in each particular site before
implementing a green solution. Without previous OPEX records, this model will be hard to
realize. This model can create disagreements between the MNO/TowerCo and the ESCO if
the savings calculation does not match among all parties. However a good power
monitoring system will eliminate those issues.
This method might not be applicable for the Indonesia market where there are a lot of
towers across the islands, representing a challenge to control and monitor.
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2. Operations and Maintenance Guide
Operations and maintenance (O&M) becomes a key-driving factor after the implementation
to ensure the ROI for each green site. The telecom industry aims at reaching operational
excellence by standardising its operations and maintenance process. The eTOM
framework is the most common process that has been used worldwide in the telecom
industry.
The eTOM is divided into three main focus areas:
1. Strategy, Infrastructure and Product covering planning and lifecycle management

2. Operations, covering the core of day-to-day operational management
3. Enterprise Management covering corporate and business support management
3
Figure 10 eTOM Framework
This section focuses on operations processes. A process is needed to give a guideline for
the field operation team to act and react during maintenance and fault handling to achieve
a network availability and OPEX efficiency.
The difference in the operations and maintenance process between the CAPEX and OPEX
model are as follows:
 In the CAPEX model, the MNO/TowerCo can do the maintenance in-house or

outsource it. In-house means the MNO/TowerCo needs to prepare all operational
logistic, resources and strategy to maintain their power network equipment. To
outsource the maintenance, the MNO/TowerCo will need to choose a third party to
maintain their power equipment.
 In the OPEX model, the ESCO will maintain its own equipment and the
MNO/TowerCo will help the ESCO monitor through their Network Operation Centre
(NOC).
3 TMForum – www.tmforum.org
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Figure 11 Operations and Maintenance Process
Monitoring
Improvement Maintenance
Managing
Audit
Performance
2.1 Monitoring
Monitoring is an essential element during the O&M process, to survey the status of the
equipment and to alert any unusual activity in the network on a real time basis. The NOC or
Network Operations Centre is responsible for the first level of monitoring.
The NOC should have the following capabilities:
 Real time monitoring: a 24/7 alarm monitoring should be established and integrated to
the NOC to be able to monitor and control the sites in real time.
 Incident tracking system: a Trouble Ticketing (TT) system should be available to
record any incident happened in the network.
 Power management: the NOC needs to be able to get a historical data on power
usage in each particular site to analyse its performance and ensure the site’s
characteristics still follow the business case and guarantee the target ROI.
 Web based alarm: web based alarm is a good feature to have for the field
maintenance team to access and report the current status for each alarm.
2.2 Maintenance
The Field maintenance team is the first line maintenance support on the ground. The
maintenance can differ based on the kind of activity.
 Preventive Maintenance
 Predictive Maintenance
 Corrective Maintenance
2.2.1 Preventive Maintenance
Preventive maintenance is a regular maintenance schedule based on time or on machine

run hours to detect, preclude or mitigate degradation of a system with the aim of sustaining
or extending its useful life through controlling degradation to an acceptable level.
To achieve the aim, followings should be done:
 Maintenance schedule: a schedule should be created on a weekly, bi-weekly,

monthly, quarterly or yearly basis along with maintenance check list. It depends on a
nature of equipment and suggestion from the manufacturer.
 Clustering: putting a team in clusters will be beneficial for maintenance and
responding to an alarm.
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 Tools: a set of tool for each field maintenance team is needed, especially portable
generator with sufficient capacity.
 Site security: a security guard has to be established to secure the assets in the site
and in many occasions, the guard will help the field team on minor trouble shooting on
the spot.
 Site logging: a logbook needs to be in place for each site, to record who has entered
the site.
2.2.2 Predictive Maintenance
Basically, predictive maintenance differs from preventive maintenance by basing

maintenance needs on the actual condition of the equipment while preventive maintenance
is time-based. The predictive maintenance is a planned activity to prevent failures in the
system.
2.2.3 Corrective Maintenance
Corrective maintenance can be defined as the maintenance, which is required when

equipment has failed, with aims to bring it back to a normal condition. The corrective
maintenance has the following objectives:
a. Eliminate breakdown
b. Bring the system to normal condition as soon as it can
c. Eliminate deviation
d. Eliminate unnecessary repair
e. Optimize all the critical planned activity
2.3 Managing Performance
A maintenance contract always comes with some Key Performance Indicator (KPI) and
Service Level Agreement (SLA) targets. Managing alerts is a way to keep KPIs and SLAs
from any degradation.
Below are some KPI examples for energy outsourcing.
Table 7 Sample of KPI
Key Performance Variable or Equation Target
Preventive Maintenance %= > 95%

Completion Rate
Network Availability %=1- > 97%
Maintenance Overtime %= < 5%

Percentage
Note: The target will depend on corporate strategy

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Table 8 Sample of SLA
Severity Target Response Time Resolution Time
Minor > 99.00% < 8 hours < 24 hours

Major > 98.50% < 15 minutes < 6 hours
Critical > 99.00% < 15 minutes < 4 hours
Note: The definition of severity may vary
2.4 Audit
Auditing is a part of the control process, and aims at finding any weakness or leakage from
daily operations. The outcome from the audit is to provide suggestions as to how to reach
operational excellence.
A few things need to be analysed and checked during an audit activity:
 Operations: preventive maintenance activity check list against the schedule, the
predictive maintenance against schedule maintenance outage, alarms log from NOC,
site log book, site security log book, and refuelling record against DG run log hour.
 Financials: a business case against a real situation in the network, operational cash
flow and third party maintenance payment.
 Resources: man-hour record against maintenance schedules, overtime record against
alarm log in the network and attendee record against the man-hour record.
2.5 Improvement
Once the audit has been done, the improvement and finding report will be released as the
outcome of the audit activity. A continuous improvement has been recognised as Act,
Plan, Do and Check (APDC).
Figure 12 Continuous Improvement Plan
 Act: Act, based on audit report.
 Plan: Proper planning to improve the findings and ensure a better network availability
and OPEX efficiency.
 Do: Execute the plan according to a timeline and audit report suggestions.
 Check: Monitor and control the execution plan.
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3. Conclusion
Using the CAPEX model is common practice in Indonesia, but the paradigm is shifting to
the OPEX model and integrating a third party ESCO player is needed for Indonesia’s green
OPEX solutions to break through in the telecom industry. The ESCO needs to get a deeper
understanding of Indonesia’s geography and a strong financial support for long-term
contracting.
Best practise in maintenance is crucial for both CAPEX or OPEX business models as
almost all MNOs have outsourced their operations to telecom equipment vendors or third
party maintenance vendors. These practises provide good guidelines for MNO/TowerCos
and the maintenance vendors. A managed service company from telecom equipment
vendors usually has a well-established and tested maintenance process, which is different
from a third party maintenance vendor that is run and owned by a local company and would
rely and follow MNO/TowerCo’s maintenance process as their internal process.
About the GSM Association About Mobile for For more information on the
Development: GSMA’s Green Power for
The GSMA represents the Serving the underserved Mobile, please email
interests of mobile operators through mobile greenpower@gsma.com
worldwide. Spanning 220
countries, the GSMA unites GSMA Mobile for
nearly 800 of the world’s Development brings together
mobile operators, as well as our mobile operator
more than 200 companies in members, the wider mobile
the broader mobile industry and the
ecosystem, including handset development community to
makers, software companies, drive commercial mobile
equipment providers, Internet services for underserved
companies, and media and people in emerging markets.
entertainment organisations. We identify opportunities for
The GSMA also produces social, economic impact and
industry-leading events such stimulate the development of
as the Mobile World scalable, life-enhancing
Congress and Mobile Asia mobile services.
Congress.
©2013. GSMA Head Office Seventh Floor, 5 New Street Square, New Fetter Lane, London EC4A 3BF
UK

Best Procurement Practice - Indonesia

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1

Best Procurement and Maintenance Practice:

Best Procurement and Maintenance Practice:

Executive Summary ........................................................................................................... 5

2.3 Managing Performance ........................................................................................ 19

MNO : Mobile Network Operator

Figure 1 Procurement Process

1. Green Procurement Guide

Procurement is an acquisition of goods or services from an external source. A sustainable

Regarding technical requirements, some key elements to consider on selecting a

 Technical solutions for green technology

 Disposal process from the solution

And financial requirements consist of:

 Vendor/ESCO financial capability to support the project

 OPEX saving target by implementing the solution

 Return on Investment (ROI)

1.1 Sustainable Procurement Process

2 GPM Market Analysis

Figure 1 Procurement Process

1.2 Different Procurement Models

Table 1 CAPEX vs OPEX Ownership

Activity CAPEX Model OPEX Model

Fueling and DG maintenance MNO ESCO

1.3 CAPEX Model

1.3.1 Process Flow: CAPEX Model

The CAPEX model process flow is described below:

Figure 2 Process Flow: CAPEX Model

Process MNO/TowerCo Vendor

Before deciding to purchase a green solution, the MNO/TowerCo’s needs and

 Site power characteristics and possibility to optimize the site load

Sample CAPEX Model

An existing site, with a power configuration as follows:

 1 kW off-grid site load

 Diesel price is around USD 1.2/L (including transportation)

Figure 3 Homer Design Model

CAPEX and OPEX Estimation

Figure 4 Investment Schedule: CAPEX Model

Figure 5 Cash Flow Comparison: CAPEX Model

OPEX Diesel OPEX Green Solution Saving

Note: OPEX Green Solution includes load schedule payment

Table 2 Financial Summary: CAPEX Model

PayBack (Year) 1.58

1.3.1.2 RFP Circulation

 The Scope of Work (SoW) and procurement’s timeline

 A clear responsibility matrix between each parties

Table 3 Sample of Responsibility Matrix

No Activity Purchaser Supplier

1.3.1.3 Evaluation and Vendor Selection

 Technical aspects: the durability is a main concern to be considered. The solution

 Post-project support: post-project support includes the customer service, warranty

 A detailed description of the scope of work

 A specific price and payment arrangement

Figure 6 Project Management Stages

Implementation Monitoring and Closing

1.4 OPEX Model

1.4.1 Process Flow: OPEX Model

Below is the procurement process flow for the OPEX model

Figure 7 Process Flow: OPEX Model

Process MNO/TowerCo ESCO